Estate - Supplemental

Question 1

Estate Rules that involve 3-years

Answer 1

1. Gift Taxes Paid in past 3 years are added to the gross estate
2. Gift Life Insurance in past 3 years where you had an incident of ownership

Incident of ownership: Right to assign, terminate, borrow against, and name/change beneficiaries.

Question 2

Step-Up in Basis for JTWROS (Married)

Answer 2

Community Property = Full Step-Up in Basis

Common Law (Default) = 1/2 Step-Up in Basis

Question 3

Liability for payment of GST Tax

Answer 3

If the transfer is a direct skip, the transferor (donor/estate) pays GST

If transfer is a taxable termination, the trustee pays GST

If transfer is a taxable distribution, the transferee pays GST

Question 4

If the insured wants to buy out their Split Dollar Endorsement Life Insurance Policy, what will they have to pay?

Answer 4

The higher of:
- Cash Value OR
- Premiums Paid