Estate Planning

Question 1

What are the requirements to disclaim a bequest?

Answer 1

-disclaiming party can’t benefit from property (w/exception, in some cases, of surviving spouse)
-may not direct any future interests
-must disclaim property w/in 9 months of decedent’s date of death
-disclaimer must be in writing

Question 2

For Sole Ownership determine:
1.) # of owners, 2.) Survivorship feature, 3.) Included in probate, 4.) Included in Gross Estate, 5.) Qualified for Marital deduction, 6.) Partitionable Involuntarily, 7.) Step to FMV @death, 8.) Actual contribution rules, 9.) Deemed contribution rule

Answer 2

1.) # of owners- 1 owner
2.) Survivorship feature- No
3.) Included in probate- Yes 100%
4.) Included in Gross Estate- Yes
5.) Qualified for Marital deduction- If married
6.) Partitionable Involuntarily- N/A
7.) Step to FMV @death- Yes
8.) Actual contribution rules- N/A
9.) Deemed contribution rule- N/A

Question 3

For Tenants in Common, determine:
1.) # of owners, 2.) Survivorship feature, 3.) Included in probate, 4.) Included in Gross Estate, 5.) Qualified for Marital deduction, 6.) Partitionable Involuntarily, 7.) Step to FMV @death, 8.) Actual contribution rules, 9.) Deemed contribution rule

Answer 3

1.) # of owners- 2 or more
2.) Survivorship feature- No
3.) Included in probate- Yes % owned
4.) Included in Gross Estate- Yes
5.) Qualified for Marital deduction- If married
6.) Partitionable Involuntarily- Yes
7.) Step to FMV @death- % of ownership
8.) Actual contribution rules- Yes
9.) Deemed contribution rule- No

Question 4

For JTWROS, determine:
1.) # of owners, 2.) Survivorship feature, 3.) Included in probate, 4.) Included in Gross Estate, 5.) Qualified for Marital deduction, 6.) Partitionable Involuntarily, 7.) Step to FMV @death, 8.) Actual contribution rules, 9.) Deemed contribution rule

Answer 4

1.) # of owners- 2 or more
2.) Survivorship feature- Yes w/death cert
3.) Included in probate- No
4.) Included in Gross Estate- Yes
5.) Qualified for Marital deduction- If married
6.) Partitionable Involuntarily- Yes
7.) Step to FMV @death- % of ownership
8.) Actual contribution rules- Yes, except spouse
9.) Deemed contribution rule- Yes, if married

Question 5

For Tenancy in Entirety, determine:
1.) # of owners, 2.) Survivorship feature, 3.) Included in probate, 4.) Included in Gross Estate, 5.) Qualified for Marital deduction, 6.) Partitionable Involuntarily, 7.) Step to FMV @death, 8.) Actual contribution rules, 9.) Deemed contribution rule

Answer 5

1.) # of owners- 2 owners
2.) Survivorship feature- Yes w/death cert
3.) Included in probate- No
4.) Included in Gross Estate- Yes
5.) Qualified for Marital deduction- Yes
6.) Partitionable Involuntarily- No
7.) Step to FMV @death- % of ownership
8.) Actual contribution rules- No
9.) Deemed contribution rule- Yes

Question 6

For Community Property, determine:
1.) # of owners, 2.) Survivorship feature, 3.) Included in probate, 4.) Included in Gross Estate, 5.) Qualified for Marital deduction, 6.) Partitionable Involuntarily, 7.) Step to FMV @death, 8.) Actual contribution rules, 9.) Deemed contribution rule

Answer 6

1.) # of owners- 2 owners
2.) Survivorship feature- No
3.) Included in probate- 50%
4.) Included in Gross Estate- 50%
5.) Qualified for Marital deduction- If married
6.) Partitionable Involuntarily- No
7.) Step to FMV @death- 100%
8.) Actual contribution rules- No
9.) Deemed contribution rule- Yes

Question 7

What are the exceptions to the terminable interest rule for the unlimited marital deduction?

Answer 7

-6 mo. survival contingency
-terminable interest (outright or in trust) in which surviving spouse has general powers of appointment
-Qualified Terminable Interest Prop (QTIP)
-Charitable Remainder Trust (CRT) where spouse is only noncharitable bene

Question 8

What are the common objectives of life insurance?

Answer 8

-Protect income stream for benes
-Create source for retirement income
-Create or sustain family wealth
-Provide liquidity at death
-Help fund education

Question 9

What are the exceptions to the transfer-for-value rule with life insurance policies?

Answer 9

When you transfer the life policy to:

-the insured
-a partner of the insured
-a partnership in which the insured is a partner
-a corp. in which the insured is a shareholder or officer
-a transferee who takes the transferor’s basis in the contract

Question 10

Do the alternative tax deductions, Unpaid Medical Expenses, Casualty Losses, & Executor Fees, use below forms to file for estate taxes?
1.) Decedent’s Income Tax Return 1040,
2.) Estate Income Tax Return 1041
3.) Estate Tax Return 706

Answer 10

Unpaid Medical Expenses:
Decedent’s Income Tax Return 1040- Yes
Estate Income Tax Return 1041- No
Estate Tax Return 706- Yes
-Not on both, but may split if >7.5% AGI

Casualty Losses:
Decedent’s Income Tax Return 1040- No
Estate Income Tax Return 1041- Yes, after death
Estate Tax Return 706- Yes, after death
-Not both, but may split $100 casualty floor

Executor Fees:
Decedent’s Income Tax Return 1040- No
Estate Income Tax Return 1041- Yes
Estate Tax Return 706- Yes
-May be waived for better tax result