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Estate Flashcards

(83 cards)

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1
Q

Are there survivorship rights in Community Property?

A

No

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2
Q

Does community property go through probate estate?

A

Yes

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3
Q

Community Property gets a _____ step-up in basis?

How much is includible in the deceased spouse’s gross estate?

A

Full step-up if it is LTCG property

50%

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4
Q

How long can a widower file MFJ?

A

2 years following spouse’s death

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5
Q

JTWROS subject to Probate?

A

No, because of its survivorship feature

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6
Q

TBE subject to Probate?

A

No

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7
Q

TBE transfer/severance can only occur with _____

A

Mutual Consent of both parties

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8
Q

TIC subject to Probate?

A

Yes

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9
Q

Each TIC owns _____ interest in the property

A

an undivided

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10
Q

Taxable gifts are added to the _____ estate

A

taxable

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11
Q

Gift taxes paid are added to the _____ estate

A

gross

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12
Q

Is premium paying considered an incident of ownership?

A

No

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13
Q

Is income producing property good to gift?

A

Yes, if donee is in a low tax bracket

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14
Q

Are payments directly for room & board considered a tax-free gift?

A

No

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15
Q

Does spouse sign for consent on other spouse’s gift tax return if making a split gift of $30,000 or less?

What about $30,000 or more

A
  1. Yes

2. No, both spouses must file gift tax returns if gift is over $30K

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16
Q

Gifts of Present Interest include:

5

A
  1. 2503 (c) Trust
  2. Direct Gift
  3. Crummey Trust
  4. 529 Plans
  5. UGMA/UTMA
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17
Q

Gifts of Future Interest include:

3

A
  1. 2503 (b) Trust
  2. Remainder interest
  3. A trust in which income will be accumulated for a period of years
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18
Q

Are Durable POAs affected by principal’s later incompetency?

Non-Durable?

A

Dureable: No

Non-Durable: Yes

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19
Q

Directs your physician to discontinue life-sustaining procedures if you are in a terminal condition or permanently unconscious state

A

AMD/Living Will

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20
Q

Why would a grantor do a defective trust?

A

It may be intentionally tainted because the grantor’s income tax bracket may be lower than the trust’s tax rate

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21
Q

Who holds Legal Title in a Trust?

A

Trustee

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22
Q

Who holds Equitable Title in a Trust?

A

Beneficiary

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23
Q

Simple or Complex Trust?

Income is distributed

A

Simple

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24
Q

Simple or Complex Trust?

Corpus distributed at termination

A

Simple

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25
Simple or Complex Trust? No charitable gifts
Simple
26
Simple or Complex Trust? Income must or may be accumulated
Complex
27
Simple or Complex Trust? Accumulated income is taxed to the trust. Income distributed is taxed to the beneficiary
Complex
28
Simple or Complex Trust? Corpus distributed per trust terms
Complex
29
Simple or Complex Trust? Charitable gifts are permitted
Complex
30
Types of Simple Trusts 4
1. 2503(b) 2. QTIP 3. QDT 4. Dynasty
31
Types of Complex Trusts 2
1. 2503(c) | 2. Generally Irrevocable Trusts are complex, but not always
32
Limits the amount that trust (or estate) beneficiaries must report as gross income for income tax purposes
Distributable Net Income
33
The annual right of withdrawal for Crummey Trusts
Equal to the value of the gift transferred capped at $15,000
34
Are distributions for ascertainable standards subject to estate tax? Gift tax?
No and No
35
A, B or C Trust? Intention is to give the decendent postmortem control over the property
B and C
36
A, B or C Trust? Amount of property transferred to the trust is usually $11,400,000
B Trust
37
A, B or C Trust? At the surviving spouse's death or termination of the trust, the remaining assets pass estate tax-free to the remainder beneficiary
B Trust
38
A, B or C Trust? The surviving spouse has transfer control over the property in the trust
A Trust
39
A, B or C Trust? Surviving spouse has the right to all income and the right to invade the entire amount fo the corpus of the trust
A Trust
40
A, B or C Trust? First spouse to die controls this trust
B and C Trust
41
A, B or C Trust? Can have HEMS and 5 or 5
B and C
42
A, B or C Trust? Subject to Estate Tax at second death
A and B
43
A, B or C Trust? The second marriage Trust
C Trust
44
A, B or C Trust? Allows the decedent to have portmortem control over the property when the surviving spouse dies
C Trust
45
A, B or C Trust? Assets pass to 2nd Spouse's beneficiary
A Trust
46
A, B or C Trust? Assets pass to trust beneficiary
B and C Trust
47
Is the GSTT exemption lost if a reverse QTIP is elected
No
48
Is Jointly-held property between non-citizen spouses considered one-half owned?
No, it is based on consideration
49
Gifts between non-citizen spouses is _____ per year
$155,000
50
Explain the 2 parts of the 2503(b) gift income
1. Income Interest: income is considered to be a gift of present interest. Annual Exclusion available 2. Remainder Interest: Gift of future interest. Annual Exclusion not available
51
In a 2503(c) trust, if the donee dies before age 21, the property must be payable to the _____ estate
Donee's
52
How long can a dynasty trust last?
For the lives in being plus 21 years and 9 months
53
Is a dynasty trust a gift of future or present interest?
Future, no annual exclusion available
54
2 Differences of a CRAT and a CRUT
1. CRAT can make 1 transfer into the trust, while a CRUT can make multiple transfers 2. CRAT must pay out a specific amount of income (sum certain) while a CRUT must pay out a specified amount of income (Fixed-percentage) each year of the reappraised value of the corpus
55
No ____ in a Pooled Income Fund
Munis
56
The Charitable Gift Annuity charitable deduction is _____
The value of the property transferred MINUS the annuity guaranteed by the charity
57
An excise tax is generally levied on a private foundation that fails to distribute at least _____ of its investment assets annuals for charitable purposes
5%
58
Difference between a GRAT and a GRUT
In a GRUT the payout percentage, while fixed, is based on the assets revalued each year. GRATs income number will never change once stated.
59
Why is a GRIT less effective than a GRAT/GRUT?
At the creation of the trust, the value of the property transferred into the trust is reduced by the retained interest (normally zero). ie Nothing is gained
60
Considered to be a Poor Man's Private Foundation
Donor Advised Fund
61
How many residences can be in a QPRT?
2, but one of them has to be the primary residence
62
When would you recommend a QPRT?
1. Large residence ($1M or more) 2. Reasonably life expectancy (Greater than 10 years) 3. Donor continues to live in the residence 4. Large estate (At least $11.4M preferably more)
63
GSTT: Unrelated person who is more than ____ younger than the transferor is a skip person
37 1/2 years
64
GSTT: Only type of transfer that has the $15K annual exclusion
Direct Skip
65
Difference between Taxable Termination and Taxable Distribution
In a taxable distribution the non-skip person doesn't die.
66
GSTT: If the transfer is a _____, the transferor (donor or estate) pays the GST
Direct Skip
67
GSTT: If the transfer is a _____, the GST is paid by the trustee
Taxable Termination
68
GSTT: If the transfer is a _____, the GST is paid by the transferee
Taxable Distribution
69
2 Outcomes that must occur before AVD can be elected
1. Using it causes a reduction in the total value of the gross estate 2. The amount of federal tax liability must be reduced as a result of filing the election
70
If the alternate valuation date is elected, can assets be valued at dates other than the 6-month alternate valuation date?
Yes
71
Can JTWROS property be disclaimed?
Yes
72
Is a disclaimer trust simple or complex?
Simple
73
Is a Disclaimer trust allowed to have HEMS provisions? 5 or 5?
HEMS: Yes 5 or 5: No
74
Intentionally defective grantor trust can be defective for: 1. Income Tax 2. Estate Tax
Yes and Yes. Could be defective for both
75
A recapitalization does what?
Freezes the asset in the gross estate
76
Other names for the B Trust | 5
1. Non-Marital B Trust 2. FAMILY TRUST 3. Credit Shelter Trust 4. Bypass Trust 5. Unified Credit Trust
77
Can a Section 6166 plan be used for sole-proprietor interests?
YES
78
Following the death of a grantor which trust should be the most effective to reduce GSTT?
A reverse QTIP
79
The GSTT exemption is not lost if a _____ is elected
Reverse QTIP
80
Step up in basis in an IRA? 401(k)?
No, not LTCG property
81
Do gifts of a future interest qualify for the $15k annual exclusion?
No
82
Can JTWROS property be disclaimed?
Yes
83
Can you disclaim TBE assets?
NO!

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