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Flashcards in Quiz 4 Deck (10):

Is a qualified plan protected by the ERISA anti alienation provision after distributions start?

No, they are only protected during the accumulation period. If a client is sued during distribution period, the distributions are partially at risk for creditors and suing.


If a trust income is used to purchase life insurance on the life of a grantor or the grantor's spouse, who pays the taxes?

The grantor pays the taxes.


Why use a family trust/disclaimer trust instead of a QPRT for the surviving spouse?

The spouse can use the exemption, but not with a QPRT.


Can an HSA pay for qualified LTC premiums?

Yes (age based).


In regard to the SML, Beta is what?

1) a constant
2) equal to the market
3) equal to 1
4) a variable

4) a variable. It's just a variable in the SML.


Self insurance refers to:

1) assumption
2) retention
3) transference
4) avoidance

2) retention. It's not transference because nobody actually paid for insurance, it's just cash set aside for an emergency.


Can you e-mail a plan to a client who's in another country?

No this violates Standard 400 because e-mail is not a suitable delivery method of recommendations in a plan.


What is the difference between a red herring and a prospectus?

A red herring omits the selling price and the size of the issue.


Charitable contribution of inventory to a charity is limited to what?

It's cost. Cans of food worth 1000 donated to the Red Cross that are worth 2000 can only be deducted for 1000.


In a 1,000,000 GRAT, if there is retained interest of 563,165, how do you find out the amount of the taxable gift?

1,000,000 minus 563,165. Don't subtract an extra 14,000.