Estate Planning

Question 1

What are “advantages of an estate”?

Answer 1

Administration of the estate (court supervision)
Inventorying and valuation of the dedent’s estate
Paying bills and revolving credit issues
Overseeing distribution of estate as directed by will or by intestacy law

Question 2

What are disadvantages to probate?

Answer 2

Loss of privacy
Exposure to will contest
Court, other costs and delays
Possible multiple state proceedings (ancillary probate)

Question 3

What assets go into the probate process?

Answer 3

Singly owned assets (fee simple)
Property held tenant in common
Community property (half at first death)
Assets that designate the bene as estate

Question 4

What can one do to avoid probate?

Answer 4

Revocable or inter vivos trust are effective probate avoidance strategies. However other techniques may also be effective such as transfer by operation of law. Most kindly property held joint tenants with rights or survivorship transferred by contract basically a beneficiary arrangement in life, insurance, annuity, contracts, retirement accounts, and qualified plans, Property conveyed by deed of title, government savings, bond, (co-ownership)

Question 5

What happens if someone dies within 120 hours of each other where the uniform simultaneous death act USDA?

Answer 5

By law are deemed to be deceased each other this rule keeps the property of one disease person from passing through the state of another disease person before ultimate passing to those who survive both

Question 6

What is a Totten trust?

Answer 6

This is a revocable trust in a bank account in which the depositor is named as trustee for another’s benefit. The depository retains the right of withdrawal until death when the deposit dies the balance passes to the beneficiary to trust operating in a few states.

Question 7

In a community property state community property is treated how when it comes to probate?

Answer 7

Community property split the assets. There are no survivorship rights. Thus a will is needed in the property will be subject to probate, stupid California wants taxes.

Question 8

What type of property in community properties get a step up in basis?

Answer 8

Only long-term capital gain property not ordinary income property

Question 9

Is term insurance a CD and an IRA considered community property?

Answer 9

Yes, unless stated otherwise even term insurance has value if the insured nut did not die for potential death benefit

Question 10

What community property gets a step up in basis?

Answer 10

A home and life insurance even if term. An example of someone paid one premium by the death benefit is $500,000.

Question 11

If all property is considered community property than half of the community property is what?

Answer 11

Goes into the gross estate

Question 12

A person in a community property state buys a property in a non-community property state what is the state treatment of said asset?

Answer 12

The property will be treated as probate in her state. It will go through ancillary probate. The property will be classified as community property because assets were purchased with her income, which is community property.

Question 13

What is quasi community property??

Answer 13

Quasi community property is property that would’ve been property except for the fact it was acquired while the couple was living in a non-community property state

Question 14

A non-spousal joint with rights or survivorship account in the state what are the issues?

Answer 14

If the non-spouse, living person cannot prove that they made contributions to the purchase of the joint property. The entire property will be in the gross estate for the first to die.

Question 15

If a spouse dies what happens with the joint property in a non-community property state?

Answer 15

Half of the property will be included in the gross estate at the fair market value at the date of death

Question 16

Why would someone recommend at tenants by entirety titling? Only for spouses

Answer 16

To protect against creditors for individual debt

Question 17

What is in the gross estate?

Answer 17

Singly own assets fee simple
Tenancy in common
Estate as beneficiary
Community property
All non-probate assets
Joint with righteous survivorship in tenancy by entire
Life insurance
General powers of appointment
Give taxes paid within three years of death
Asterix generation-skipping transfer tax GSTT paid within three years of death are not added back into gross estate

Question 18

What are the components of form 706?

Answer 18

You have the gross estate, less funeral, expenses, administration, expenses, debts, taxes, and casually losses that equates the adjusted gross estate. You are then subtract marital and terrible deductions. You would then have the taxable estate you would add adjusted taxable gifts, amount exceeding annual gift exclusion. This creates the tax base you would take this amount minus the state tax deduction of $13.6 million for 2024 remainder is taxed at 40% tentative tax less gift taxes paid equals net estate tax.

Question 19

What is a life estate?

Answer 19

A life estate is a right to the property until death, at time it is not included in the estate.

Question 20

What are exclusions from gross estate?

Answer 20

Life insurance owned by others even when the deceit is the insured
Complete gift
Life estate for decedents own life only

Question 21

What are the adjusted gross estate deductions?

Answer 21

Funeral expenses, administrative expenses, debts, taxes, income, taxes, and casually losses. It’s also called tentative taxable estate.

Question 22

What is a what is a charitable deduction for an estate?

Answer 22

100% deductible for both estate and gift tax purposes

Question 23

When is there an unlimited amount of property passing to the surviving spouse? Can pass state tax-free if

Answer 23

The property is included in this descendants estate
The property actually passes to the surviving spouse

Question 24

Who has a liability for payment for the GSTT tax?

Answer 24

If the transfer is a direct skip, the transfer pays the GSTT
If the transfer is a taxable termination parent die in a trust,, the GSTT is paid by the trustee
If the transfer is a taxable distribution, the GSTT is paid by the transfee from a trust

Question 25

What are the duties of a fiduciary?

Answer 25

Loyalty to the beneficiaries duty to not self deal duty to preserve property and make it productive duty to be impartial for all beneficiaries

Question 26

What is a bypass trust also known as a B trust?

Answer 26

The first spouse to die controls the property of the trust. Property is transferred to the trust at the time of the first bath’s death. The amount of property transferred to the trust equals the federal estate tax exemption. The bypass trust can be structured to provide a stream of income to the surviving spouse. The stream of income can also be split among other individuals. In special circumstances, a spouse can access hymns or five or five provisions. The bypass trust property will not be included in the survivor, spouses estate at the death of the second spouse the remaining pass as a estate tax free to the beneficiary typically the couples children relatives, etc.

Question 27

What are marital trust or A trust?

Answer 27

The second spouse to die controls the property of the trust, a marital trust generally operates as a power of trust. The marital trust is found with property transferred to the surviving spot at the decedent‘s death. The property passes a state tax-free under the unlimited marital estate tax deduction. The surviving spouse has either a lifetime or testy general power of appointment over this property and can transfer it to whomever here she wishes the key characteristics of a marital trust are that the surviving spouse has post more control over the property in the trust the surviving spouse has a right to all income and ability invade the entire amount of the corpus of the trustthe surviving spouse can determine who receives the property of the trust when here she dies as a result, although a trust properties included in the decedent state, it is not subject to the state tax. The property must be included in the gross estate of the surviving spouse.

Question 28

What is a Q-tip or a c trust?

Answer 28

With a Q-tip the first Bouse to die controls the property of the trust the Q-tip trust is also called current income interest, trust or AC trust this trust is appropriate when the decision wishes to provide this possible ream of income that will be paid only for the life yet also wish to qualify the property for the marital deduction The keywords for Q-tip are lame, lifetime income interest for the per spouse, annual payments to the spouse mandatory payments to the spouse exclusively for the spouse. The main advantage of a Q-tip is that allows the decedent to have post more control over the property when the surviving sauce dies a Q-tip can distribute income to the serving process for life and yet allow deceit to determine who ultimately receives the property when the serving cell dies that property can qualify the premier abduction in the state of deceive, but must be included as an asset in the gross state of the spouse in order for the property to be treated as Q to probably the executor of the deed in the state must make an electionon the decedents federal tax return. The surviving spouse may be given a limited power invasion of the corpus and income of the Q-tip.

Question 29

What is a pour over trust?

Answer 29

This is the capital of trust for assets that are not in a revocable trust to be affected. The revocable trust is set up first and then the pour over Will is executed.

Question 30

A joint property held jtwros in a common law state will never go into

Answer 30

Probate

Question 31

100% of the first spouse to die goes where

Answer 31

Gross estate 50% if married and jtwros

Question 32

A bypass or b trust does not qualify for what?

Answer 32

A marital deduction

Question 33

Gifts to an irrevocable trust indicates what?

Answer 33

Not a present gift but a future gift, this would not qualify for the annual gift exclusion

Question 34

An ILL wouldn’t be including in the estate if there was never ownership of the policy prior

Answer 34

To placing it in the ill

Question 35

Is claiming the gstt exclusive elective?

Answer 35

Yes The gstt may be imposed years after trust property is transferred

Question 36

The generation skipping tax is integrated with gift and estate taxes to avoid double taxation, t or f?

Answer 36

False. Gstt is an additional tax

Question 37

Indirect skips cause the gstt to be due later

Answer 37

The time at which the gstt is due can be at the time the donor makes the transfer or later

Question 38

If a child is paid directly for working for their parent what taxes would they owe

Answer 38

Income tax on earnings Possible utma kiddie tax No fica tax due to being under 18 years old

Question 40

Asertainsble standard is not subject to a gift or estate tax HEMS. What is hems

Answer 40

Health, education maintenance and support. Maintenance and support are basically anything Hems could be limited

Question 42

A wealth replacement trust is also called a

Answer 42

ILIT

Question 44

Jtwros can be disclaimed t or f

Answer 44

True