Estate planning exam 4 questions with
complete solutions
Floyd has a gross estate of $14 million and Thelma has an estate of $2 million. Floyd wants
Thelma to receive a life estate in a trust that qualifies for a marital deduction in his estate and
which passes the remaining assets to his children from a prior marriage. He also wants to utilize
his unified credit and reduce the couple's combined estate tax liability. Three of the following
estate planning techniques will accomplish Floyd's objectives, except: - correct answer ✔✔
Floyd should establish a power of appointment trust for Thelma.
Clients who want to avoid paying estate taxes in both spouses' estates and defer paying estate
taxes until the surviving spouse's death should establish which combination of trusts? - correct
answer ✔✔ A bypass trust and a power of appointment trust
Anderson has an estate worth $8 million. His wife, Shannon, has an estate worth $6 million.
Anderson's estate plan consists of funding a bypass trust equal to the exemption equivalent
amount, with the remaining property transferred to a trust for Shannon. Shannon does not
need or want income from this trust so Anderson will fund the trust with land that is not
expected to appreciate in value. Anderson wants to avoid an estate tax liability at his death.
Other than a bypass trust, what type of trust should he create for Shannon? - correct answer
✔✔ An estate trust
Loretta's will establishes a by-pass trust at her death which also gives her husband Rex a right to
exercise a power according to an ascertainable standard. How much of the trust corpus will be
included in Rex's estate at his death? - correct answer ✔✔ No amount attributed to the trust is
included in Rex's gross estate.
Which statement does not correctly pertain to portability? - correct answer ✔✔ Portability has
been adopted on both the federal and state levels in all states.
, Which statement regarding testamentary bypass trusts and QTIP trusts is not correct? - correct
answer ✔✔ The assets passing to both trusts will avoid probate at the first spouse's death.
Kelsey and Maisy are married. Kelsey inherited a large estate from his father and he now has an
estate valued at $30 million. His financial planner advised him to equalize his estate by gifting
half to Maisy now. The couple executed new wills which establish a bypass trust funded with
the full exclusion amount and a QTIP trust funded with the remaining assets to benefit each
surviving spouse and their children. Assume QTIP elections will be made upon death. Which
statement is not correct? - correct answer ✔✔ The surviving spouse can elect portability on the
decedent spouse's estate tax return.
Colby is actively involved with supporting his alma mater. In 2020 Colby contributed $11,000 of
highly appreciated securities and $20,000 cash to an Endowment Appeal, and spent about 100
hours of his time normally billed at $200/hour helping them to raise funds. If no further
charitable contributions are made in 2020, what is the total value of Colby's charitable
contributions for the year? - correct answer ✔✔ $31,000
Bonnie is an attorney and has won a large case. She will have income of $500,000 this year.
Bonnie wishes to make a gift of $100,000 to the American Red Cross. Which of the following
assets should she gift during her lifetime? - correct answer ✔✔ Google stock that she purchased
two years ago for $10,000. It is currently worth $100,000.
Sam meets with Ed, a CFP® professional, to discuss his estate planning objectives. Sam wishes to
give $500,000 to charity during his lifetime or at his death. Which of the following charitable
planning techniques should not be recommended to Sam? - correct answer ✔✔ Sam should
include the bequest in his will, and his executor can decide which property is best suited to
make this bequest.
Joseph is 75 years old. He is very interested in making a charitable contribution of highly
appreciated securities, but cannot afford to give up the income stream generated by these
securities. Given Joseph's age, he is most concerned about receiving a guaranteed amount of
income; however, he would also like to provide a benefit to his favorite charity. Which of the
following vehicles can best accomplish Joseph's planning objectives? - correct answer ✔✔ CRAT
complete solutions
Floyd has a gross estate of $14 million and Thelma has an estate of $2 million. Floyd wants
Thelma to receive a life estate in a trust that qualifies for a marital deduction in his estate and
which passes the remaining assets to his children from a prior marriage. He also wants to utilize
his unified credit and reduce the couple's combined estate tax liability. Three of the following
estate planning techniques will accomplish Floyd's objectives, except: - correct answer ✔✔
Floyd should establish a power of appointment trust for Thelma.
Clients who want to avoid paying estate taxes in both spouses' estates and defer paying estate
taxes until the surviving spouse's death should establish which combination of trusts? - correct
answer ✔✔ A bypass trust and a power of appointment trust
Anderson has an estate worth $8 million. His wife, Shannon, has an estate worth $6 million.
Anderson's estate plan consists of funding a bypass trust equal to the exemption equivalent
amount, with the remaining property transferred to a trust for Shannon. Shannon does not
need or want income from this trust so Anderson will fund the trust with land that is not
expected to appreciate in value. Anderson wants to avoid an estate tax liability at his death.
Other than a bypass trust, what type of trust should he create for Shannon? - correct answer
✔✔ An estate trust
Loretta's will establishes a by-pass trust at her death which also gives her husband Rex a right to
exercise a power according to an ascertainable standard. How much of the trust corpus will be
included in Rex's estate at his death? - correct answer ✔✔ No amount attributed to the trust is
included in Rex's gross estate.
Which statement does not correctly pertain to portability? - correct answer ✔✔ Portability has
been adopted on both the federal and state levels in all states.
, Which statement regarding testamentary bypass trusts and QTIP trusts is not correct? - correct
answer ✔✔ The assets passing to both trusts will avoid probate at the first spouse's death.
Kelsey and Maisy are married. Kelsey inherited a large estate from his father and he now has an
estate valued at $30 million. His financial planner advised him to equalize his estate by gifting
half to Maisy now. The couple executed new wills which establish a bypass trust funded with
the full exclusion amount and a QTIP trust funded with the remaining assets to benefit each
surviving spouse and their children. Assume QTIP elections will be made upon death. Which
statement is not correct? - correct answer ✔✔ The surviving spouse can elect portability on the
decedent spouse's estate tax return.
Colby is actively involved with supporting his alma mater. In 2020 Colby contributed $11,000 of
highly appreciated securities and $20,000 cash to an Endowment Appeal, and spent about 100
hours of his time normally billed at $200/hour helping them to raise funds. If no further
charitable contributions are made in 2020, what is the total value of Colby's charitable
contributions for the year? - correct answer ✔✔ $31,000
Bonnie is an attorney and has won a large case. She will have income of $500,000 this year.
Bonnie wishes to make a gift of $100,000 to the American Red Cross. Which of the following
assets should she gift during her lifetime? - correct answer ✔✔ Google stock that she purchased
two years ago for $10,000. It is currently worth $100,000.
Sam meets with Ed, a CFP® professional, to discuss his estate planning objectives. Sam wishes to
give $500,000 to charity during his lifetime or at his death. Which of the following charitable
planning techniques should not be recommended to Sam? - correct answer ✔✔ Sam should
include the bequest in his will, and his executor can decide which property is best suited to
make this bequest.
Joseph is 75 years old. He is very interested in making a charitable contribution of highly
appreciated securities, but cannot afford to give up the income stream generated by these
securities. Given Joseph's age, he is most concerned about receiving a guaranteed amount of
income; however, he would also like to provide a benefit to his favorite charity. Which of the
following vehicles can best accomplish Joseph's planning objectives? - correct answer ✔✔ CRAT
