Estate Planning

Question 1

Three Year Rule

Answer 1

Transfers made within 3 years of death are included in estate of transferor,

• Life Insurance
• Gifts

Question 2

General Power of Appointment

Answer 2

Holder can exercise the power w/out any conditions or restrictions-virtually the same as outright ownership

Question 3

Special (limited) Power of Appointment

Answer 3

Restricted powers/Some are limited to an ascertainable standard-relating to HEMS-Health, Education, Maintenance, or Support

Question 4

Durable Power of Attorney

Answer 4

Features remain in effect through principal’s incapacity. Pwer of Attorney does not.

Question 5

Special Needs Trust

Answer 5

Allows public benefits (medicaid, Section 8, SSDI)

Question 6

Crummey Trust

Answer 6

Irrevocable Trust where a minor has ‘demand’ rights. They can typically take out the lesser of the annual exclusion or the value of the annual gift transferred

Question 7

QTIP Trust

Answer 7

Current Income Trust or ‘C’ Trust.
Provides the Surviving Spouse with a stream of income that will be paid for life
Qualifies for Marital Deduction-Like ‘B’ Trust

Can have HEMS and 5 or 5 provision
Health, Education, Maintenance, or Support
LAME
Lifetime income interest for spous
Annual Payments,
Madatory Payments
Exclusively for spouse

Question 8

Estate Tax Due

Answer 8

9 mo after death

Question 9

UGMA

Answer 9

Kiddie Tax Rules,
Funded w/ Cash type assets-EE’s, securities, MF’s,
Normal distribution at 18
included in custodian’s estate

Question 10

UTMA

Answer 10

Any type of asset: RE, Distributed @ 21,

included in custodian’s estate