CANNON TRUST FUNDAMENTALS
Does-an-Irrevocable-Trust-move-out-of-the-gross-estate-of-the-Grantor?---ans-✔✔Yes
What-is-the-current-Basic-Exclusion-Amount-(BEA)?---ans-✔✔$12.06-million
Gross-estate-includes...-(3-things)---ans-✔✔Everything-that-the-decedent-owned,-
controlled,-retained
Joint-interests-owned-by-spouses-(only)-are-presumed-to-be-what-percentage-during-the-
first-estate-to-dies-gross-estate?---ans-✔✔50%/50%-assumption
All-other-joint-interests-that-do-not-include-spouses-are-presumed-to-be-what-percentage-
during-the-first-estate-to-dies-gross-estate?---ans-✔✔100%-includable-in-the-first-estate
What-is-the-step-up-in-basis-for-common-law-states-with-tenants-in-common?---ans-
✔✔1/2-step
What-is-the-step-up-in-basis-for-community-property-states?---ans-✔✔1-full-step
Which-two-types-of-gifts/deductions-are-unlimited?---ans-✔✔Charitable-and-marital
When-must-the-PR/Trustee-elect-for-an-alternate-valuation-date?---ans-✔✔6-months-after-
DOD-(or-before)
DSUE-=-?---ans-✔✔Deceased-Spouse-Unused-Exclusion
An-estate-tax-return-form-(Form-706)-must-be-filed...---ans-✔✔within-9-months-of-DOD
What-does-filing-an-estate-tax-return-(within-9-months)-of-the-DOD-of-the-first-spouse?---
ans-✔✔Allows-portability-of-DSUE-to-SS
Gift-splits-apply-to...?---ans-✔✔Spouses-only
applicable-exclusion-amount-(AEA)---ans-✔✔BEA-+-DSUE-=-AEA-of-surviving-spouse
*could-be-up-to-24.12-million-right-now
Form-709-must-be-filed-when...---ans-✔✔Anyone-makes-a-gift-over-$16K-that-year
*File-on-April-15th-with-your-Form-1040
, Trust-that-requires-mandatory-distribution-of-all-income-to-beneficiary-on-annual-basis,-
either-outright,-or-to-custodial-account---ans-✔✔Simple-Trust
A-power-of-attorney-that-ONLT-becomes-effective-at-the-time-of-incapacity---ans-
✔✔Spring-DPOA
Bob-and-Sue-are-married-and-live-in-a-common-law-state.-They-put-in-$100-in-joint-names-
with-survivorship-rights.-When-Sue-dies,-before-Bob,-it-has-grown-to-$150.-How-much-is-
includable-in-Sue's-gross-estate?---ans-✔✔$75-(50%/50%-assumption-of-asset-with-
spouses)
Testamentary-Trusts-at-funding-can-have-all-of-the-following-EXCEPT-which-one-of-the-
following?---ans-✔✔A.-Revocable-(Right-answer)
B.-More-flexible-in-protecting-children-than-a-court-established-guardianship
C.-Sometimes-tax-advantaged-and-an-asset-protection-devices
D.-Set-up-under-the-terms-of-the-decedant's-will
Which-of-the-following-is-the-most-contractual,-least-fiduciary-relationship?
A.-Guardianship
B.-Trustee
C.-Agency
D.-Executorship---ans-✔✔C.-Agency
In-the-transfer-A-to-B,-B-has-what-kind-of-interest-following-the-transfer?
A.-Simple-Trust
B.-Fee-Simple
C.-Reversionary
D.-Remainder---ans-✔✔B.-Fee-Simple
Under-JTWROS,-when-one-tenant-dies-which-of-the-following-best-describes-the-result?
A.-His/her-share-passes-through-her-will-to-their-heirs
B.-His/her-share-passes-by-law-to-their-heirs,-not-through-their-will
C.-His/her-share-passes-to-the-surviving-tenant,-regardless-of-what-their-will-says
D.-the-asset-must-be-sold-and-the-estate-gets-1/2-the-proceeds---ans-✔✔C.-His/her-share-
passes-to-the-surviving-tenant,-regardless-of-what-their-will-says
Value-of-Qualified-Interests-determined-under-IRC-7530---ans-✔✔120%-of-the-federal-
midterm-rate
Appreciated-assets-donated-to-a-private-foundation-may-be-deducted-from-income-up-to-
what-percentage?---ans-✔✔20%-of-AGI
Appreciated-assets-donated-to-a-public-charity-may-be-deducted-from-income-up-to-what-
percentage?---ans-✔✔30%-of-AGI
Does-an-Irrevocable-Trust-move-out-of-the-gross-estate-of-the-Grantor?---ans-✔✔Yes
What-is-the-current-Basic-Exclusion-Amount-(BEA)?---ans-✔✔$12.06-million
Gross-estate-includes...-(3-things)---ans-✔✔Everything-that-the-decedent-owned,-
controlled,-retained
Joint-interests-owned-by-spouses-(only)-are-presumed-to-be-what-percentage-during-the-
first-estate-to-dies-gross-estate?---ans-✔✔50%/50%-assumption
All-other-joint-interests-that-do-not-include-spouses-are-presumed-to-be-what-percentage-
during-the-first-estate-to-dies-gross-estate?---ans-✔✔100%-includable-in-the-first-estate
What-is-the-step-up-in-basis-for-common-law-states-with-tenants-in-common?---ans-
✔✔1/2-step
What-is-the-step-up-in-basis-for-community-property-states?---ans-✔✔1-full-step
Which-two-types-of-gifts/deductions-are-unlimited?---ans-✔✔Charitable-and-marital
When-must-the-PR/Trustee-elect-for-an-alternate-valuation-date?---ans-✔✔6-months-after-
DOD-(or-before)
DSUE-=-?---ans-✔✔Deceased-Spouse-Unused-Exclusion
An-estate-tax-return-form-(Form-706)-must-be-filed...---ans-✔✔within-9-months-of-DOD
What-does-filing-an-estate-tax-return-(within-9-months)-of-the-DOD-of-the-first-spouse?---
ans-✔✔Allows-portability-of-DSUE-to-SS
Gift-splits-apply-to...?---ans-✔✔Spouses-only
applicable-exclusion-amount-(AEA)---ans-✔✔BEA-+-DSUE-=-AEA-of-surviving-spouse
*could-be-up-to-24.12-million-right-now
Form-709-must-be-filed-when...---ans-✔✔Anyone-makes-a-gift-over-$16K-that-year
*File-on-April-15th-with-your-Form-1040
, Trust-that-requires-mandatory-distribution-of-all-income-to-beneficiary-on-annual-basis,-
either-outright,-or-to-custodial-account---ans-✔✔Simple-Trust
A-power-of-attorney-that-ONLT-becomes-effective-at-the-time-of-incapacity---ans-
✔✔Spring-DPOA
Bob-and-Sue-are-married-and-live-in-a-common-law-state.-They-put-in-$100-in-joint-names-
with-survivorship-rights.-When-Sue-dies,-before-Bob,-it-has-grown-to-$150.-How-much-is-
includable-in-Sue's-gross-estate?---ans-✔✔$75-(50%/50%-assumption-of-asset-with-
spouses)
Testamentary-Trusts-at-funding-can-have-all-of-the-following-EXCEPT-which-one-of-the-
following?---ans-✔✔A.-Revocable-(Right-answer)
B.-More-flexible-in-protecting-children-than-a-court-established-guardianship
C.-Sometimes-tax-advantaged-and-an-asset-protection-devices
D.-Set-up-under-the-terms-of-the-decedant's-will
Which-of-the-following-is-the-most-contractual,-least-fiduciary-relationship?
A.-Guardianship
B.-Trustee
C.-Agency
D.-Executorship---ans-✔✔C.-Agency
In-the-transfer-A-to-B,-B-has-what-kind-of-interest-following-the-transfer?
A.-Simple-Trust
B.-Fee-Simple
C.-Reversionary
D.-Remainder---ans-✔✔B.-Fee-Simple
Under-JTWROS,-when-one-tenant-dies-which-of-the-following-best-describes-the-result?
A.-His/her-share-passes-through-her-will-to-their-heirs
B.-His/her-share-passes-by-law-to-their-heirs,-not-through-their-will
C.-His/her-share-passes-to-the-surviving-tenant,-regardless-of-what-their-will-says
D.-the-asset-must-be-sold-and-the-estate-gets-1/2-the-proceeds---ans-✔✔C.-His/her-share-
passes-to-the-surviving-tenant,-regardless-of-what-their-will-says
Value-of-Qualified-Interests-determined-under-IRC-7530---ans-✔✔120%-of-the-federal-
midterm-rate
Appreciated-assets-donated-to-a-private-foundation-may-be-deducted-from-income-up-to-
what-percentage?---ans-✔✔20%-of-AGI
Appreciated-assets-donated-to-a-public-charity-may-be-deducted-from-income-up-to-what-
percentage?---ans-✔✔30%-of-AGI
