Which statement concerning martin and regina estate plans

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Reference no: EM132360398

Answering the following case study requires reading the information in these links:

Case Study: The Beckers

Case Study: The Beckers (Property Table)

1. Which statement concerning Martin and Regina's estate plans is NOT correct?

a. Regina can name the ultimate beneficiaries of the Power of Appointment trust in her Will.

b. If Martin decides to sell Regina's rare coin collection after her death, his basis will be Regina s inherited basis of $180,000.

c. Regina has been given an ascertainable standard in the By-pass trust.

d. Assets passing to the By-pass trust for Regina will take advantage of Martin's unified credit.

2. Which of the following statements concerning the irrevocable life insurance trust is correct?

a. If the trust has Crummey provisions, Martin and Regina can use gift-splitting to reduce the gift tax on annual premium payments transferred into the trust.

b. Martin can borrow from the cash values of the policies without adverse tax consequences.

c. If Regina dies after Martin, a gift tax will incur when trust corpus is transferred equally to the children.

d. If the beneficiaries are given Crummey powers and they let their annual right of withdrawal lapse, they are making gifts to the other trust beneficiaries.

3. If Martin dies today, what will the value of his gross estate be for federal estate tax purposes?

a. $2,420,000

b. $2,667,500

c. $2,967,500

d. $3,967,500

4. Assume for this question that Martin's daughter Debbie died unexpectedly in an accident and Martin died a year later leaving the same Will described in the case facts. What portion of the corpus of the By-pass trust would each of Debbie's children receive at Regina's death?

a. 1/6

b. 1/5

c. 1/4

d. 1/2

Case Study: Anita Morrison

5. If Anita decides to make gifts to each of her 5 grandchildren, which one of the following statements is not correct?

a. Gifts up to $75,000 per child may be made to a Section 529 plan without incurring gift tax.

b. Gifts made to each grandchild that exceed $15,000 this year would be subject to both gift tax and generation skipping transfer tax before exclusions are applied.

c. Gifts made under the UTMA with Anita as custodian would not be included in Anita's gross estate at her death.

d. An irrevocable trust established by Anita for the benefit of her grandchildren who are the only beneficiaries in the trust, is a GST direct skip trust.

6. Which statement regarding incapacity documents is not correct?

a. A durable power of attorney continues until it is revoked by the principal or upon the principal's death.

b. The scope of a power of attorney can be limited or nondurable and can restrict an agent to act in a specific capacity.

c. A non-durable power of attorney ceases when a principal becomes incapacitated.

d. A springing durable power of attorney is activated once a health care agent certifies that the principal has become incapacitated.

7. Anita, in her grief, wants to move closer to her daughter Lynn.If Anita were to sell her home today for $810,000 what would be her basis in the property?

a. $400,000

b. $410,000

c. $421,000

d. $431,000

8. Anita wants to make a substantial donation to her library this year that will give the library guaranteed fixed income over the next six years.Anita also wants the assets to revert back to her after the charity s income term ends, to distribute them to her children through her Will.What type of charitable technique will accomplish her objectives?

a. A charitable remainder annuity trust

b. A charitable gift annuity

c. A grantor charitable lead annuity trust

d. A grantor retained annuity trust

9. Gloria transfers $2 million into a trust for her grandchildren. She allocated $2 million of her GST exemption to the trust. At her death, the trust is valued at $3 million. What is the inclusion ratio and GST tax due at her death?

a. Zero

b. One

c. 0.33

d. 0.5

10. In which of the following situations is a marital deduction disallowed?

a. A husband established a testamentary trust by will that gave his wife the income interest for life. His executor made a QTIP election on IRS form 706

b. A wife bequeathed her husband $10 million in cash

c. A husband gave his non-citizen wife $2 million

d. A wife established a testamentary trust that gave her son the income interest for 2 years and her husband the remainder interest.

Attachment:- Anita Morrison-case study.rar

Attachment:- CFP questions.rar

Reference no: EM132360398

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