Estate Planning Exam 2 questions well
answered
Rosemary and Dean, both in their sixties, recently got married. This is their second marriage.
Rosemary is wealthy and has a large portfolio with high capital gains. If Rosemary dies first, she
wants to ensure a comfortable lifestyle for Dean but wants the inheritance to go to her children
when he eventually dies. To achieve her objectives and minimize taxes at death, Rosemary
should leave Dean:
-QTIP trust for the benefit of Dean
-Bypass trust (Credit Shelter Trust) with access to only trust income for him and on his death
trust capital will be distributed to her chlldren
-Combination of Bypass and QTIP trust with Dean as income beneficiary and children as
remainder beneficiaries. - correct answer ✔✔
Jack created a Section 2503(c) trust for his son. He decided to be both the donor and trustee. If
he dies while remaining the trustee, the principal of the trust could be included in his or her
gross estate.
T or F - correct answer ✔✔ T
What type of assets can be put in a QPRT?
-Assets that are expected to grow faster than the 7520 rate
-An interest in a closely held business
answered
Rosemary and Dean, both in their sixties, recently got married. This is their second marriage.
Rosemary is wealthy and has a large portfolio with high capital gains. If Rosemary dies first, she
wants to ensure a comfortable lifestyle for Dean but wants the inheritance to go to her children
when he eventually dies. To achieve her objectives and minimize taxes at death, Rosemary
should leave Dean:
-QTIP trust for the benefit of Dean
-Bypass trust (Credit Shelter Trust) with access to only trust income for him and on his death
trust capital will be distributed to her chlldren
-Combination of Bypass and QTIP trust with Dean as income beneficiary and children as
remainder beneficiaries. - correct answer ✔✔
Jack created a Section 2503(c) trust for his son. He decided to be both the donor and trustee. If
he dies while remaining the trustee, the principal of the trust could be included in his or her
gross estate.
T or F - correct answer ✔✔ T
What type of assets can be put in a QPRT?
-Assets that are expected to grow faster than the 7520 rate
-An interest in a closely held business
