Estate Planning

Question 1

Step up in basis: community property vs. joint tenancy

Answer 1

Community property gets a full step up in basis at death. JT only gets a half step up.

Question 2

Can Tenancy by the Entirety be disclaimed?

Answer 2

NO it cannot.

Question 3

Can Joint Tenancy be disclaimed?

Answer 3

YES it can.

Question 4

Would a testamentary trust go through probate?

Answer 4

No

Question 5

What type of property does ancillary probate affect?

Answer 5

Real property

Question 6

Revocable Trust vs. Durable Power

Answer 6

Rev trust continues after death, durable power expires at death.

Question 7

Why would a single life annuity NOT be included in the gross estate?

Answer 7

Payments stop at death

Question 8

True or False: All probate assets are included in the gross estate.

Answer 8

True

Question 9

How could a business owner gift business interests to family members?

Answer 9

Family Limited Partnerships, LLCs, gift closely held stock.

Question 10

Gift Tax is Form _____

Answer 10

709

Question 11

Estate Tax is Form ______

Answer 11

706

Question 12

What is a big disadvantage of a nondurable power of attorney?

Answer 12

It does not survive incompetency.

Question 13

When would a trust be taxed as a separate entity?

Answer 13

• Irrevocable

- Income is accumulated

Question 14

True or False: The Bypass Trust qualifies for the marital deduction.

Answer 14

False

Question 15

UGMA vs. UTMA

Answer 15

UGMA cannot hold real estate, UTMA can. UGMA must be funded with cash type assets.

Question 16

Can additional assets be added to a CRUT and/or a CRAT?

Answer 16

Additional assets could be added to a CRUT, but not a CRAT.

Question 17

Is Premium Payment of a Life Insurance Policy considered an “incident of ownership”?

Answer 17

No.

Question 18

What is the main disadvantage of an installment sale?

Answer 18

If the seller dies during the sale period, the remaining assets will be included in their estate.

Question 19

GRAT / GRUT Definition

Answer 19

Irrevocable trusts that allow the grantor to make gifts of property while retaining an income interest. The owner must outlive the term of the trust.

Question 20

QPRT

Answer 20

An irrevocable transfer of a personal residence that the owner can still live in and at the end of the term of the trust the residence is removed from their personal estate.

Question 21

When would an ILIT be considered “tainted”?

Answer 21

If it is used to pay premium and support of the grantor. Will be taxed to the grantor in that case.

Question 22

True or False: The GST is also subject to gift tax.

Answer 22

True

Question 23

Would gift tax payable be a deductible item from a gross estate?

Answer 23

Yes it would.

Question 24

True or false: Pour-over will assets will not be included in the gross estate.

Answer 24

False, they will be

Question 25

UTMA vs. Children’s Trust (2503(c)) - What is the Tax difference?

Answer 25

UTMA is taxed to the child, which is generally a more favorable rate than the Trust tax rate.

Question 26

Who appoints a guardian?

Answer 26

The Court

Question 27

A donor advised fund is controlled by an individual donor or a group of various donors?

Answer 27

An individual donor

Question 28

Is tenancy by the entirety deducted from the gross estate?

Answer 28

Yes, because it goes to the surviving spouse.