Estate planning Exam 4 Questions with Correct Answers Latest 2025-2026
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: - Answers 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? -
Answers 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? - Answers 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? - Answers No amount attributed to the trust is included
in Rex's gross estate.
Which statement does not correctly pertain to portability? - Answers 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? -
Answers 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? - Answers 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? - Answers $31,000
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: - Answers 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? -
Answers 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? - Answers 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? - Answers No amount attributed to the trust is included
in Rex's gross estate.
Which statement does not correctly pertain to portability? - Answers 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? -
Answers 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? - Answers 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? - Answers $31,000
