All the following statements concerning real property ownership by married couples as joint tenants with right of survivorship are correct EXCEPT:
A. Jointly held property between spouses does not pass through the probate estate of the first spouse to die.
B. In common-law states the total value of the property receives a stepped-up tax basis in the estate of the first spouse to die.
C. All benefits of ownership remain available to the surviving spouse without interruption during the administration of the deceased spouse's estate.
D. The deceased spouse's interest in the property qualifies for the marital deduction since it passes outright to the surviving spouse.
Which of the following transactions is a taxable gift for federal gift tax purposes?
A. A grandmother purchased a U.S. savings bond that is registered as payable to her and her two grandchildren and the bond has not yet been surrendered for cash.
B. A father made a deposit of $100,000 into a bank account titled jointly with his son, and the son has not yet made any withdrawals.
C. A mother purchased listed common stocks titling them in joint names with her daughter and the stocks have not yet been sold.
D. A man deeded real estate to his sister but did not record the deed nor did he deliver the deed to his sister.
Which of the following are ways of passing property from a deceased spouse to a surviving spouse so that the property will qualify for the federal estate tax marital deduction?
1.
When the surviving spouse receives the property by electing to take against the deceased spouse's will
2.
When the surviving spouse receives the property as a consequence of the qualified disclaimer of another beneficiary
A. Both 1 and 2
B. Neither 1 nor 2
C. 1 only
D. 2 only
Which of the following statements concerning state death taxes is correct?
A. A state inheritance tax is imposed on the right of the deceased to leave property to heirs.
B. A state estate tax is imposed on the right of heirs to receive property from the deceased.
C. State estate and inheritance taxes are generally imposed at the same rate regardless of the relationship of the deceased to the beneficiary.
D. A deduction for the full amount of state death taxes paid by a decedent estate is allowed on a decedent federal estate tax return.
Which of the following statements concerning the generation-skipping transfer tax (GSTT) is correct?
A. The applicable credit amount may be applied against generation-skipping transfers.
B. An annual exclusion is available for direct skip gifts to a grandchild.
C. The GSTT is inapplicable to transfers to nonrelated transferees.
D. The GSTT is imposed only if no federal estate or gift tax applies to a transfer.
All the following statements concerning a grantor-retained unitrust (GRUT) are correct EXCEPT:
A. When the grantor dies during the retained interest term, the estate tax benefits are increased.
B. When the trust is created, the grantor makes an irrevocable transfer to remainderperson(s).
C. The transfer of the remainder interest in the trust is a current gift for gift tax purposes.
D. The grantor's applicable credit amount may be applied to the gifted remainder interest in the trust.
Which of the following areas of consideration present common ethical issues for the estate planner?
A. Consistency
B. Compatibility
C. Compensation
D. Contracts
Mr. Barlow died early this year. Under the terms of his will he left all his real estate and tangible personal property to his son. All the remainder of his probate estate was left to his wife, Mrs. Barlow. The following is a list of Mr. Barlow's probate assets and their fair market values at the time of his death:
-Commercial real estate $150,000
-Furniture and fixtures 75,000
-Listed common stock 300,000
-
Other securities 200,000
A.
$400,000
B.
$825,000
C.
$600,000
D.
$500,000
All of the following statements concerning the use of an irrevocable life insurance trust to solve liquidity problems of the insured's estate are correct EXCEPT:
A. The grantor should avoid obtaining incidents of ownership in the policy.
B. The grantor is the most appropriate choice for trustee.
C. Gift taxes can be avoided for premium contributions made by the grantor.
D. The grantor can avoid inclusion of the corpus in his or her gross estate.
A married man is the sole owner of a small business with an estate tax value of $500,000. In addition, he and his wife own an office building as joint tenants with right of survivorship which they purchased five years ago. The building has an estate tax value of $1,500,000. They are considering dissolving the joint tenancy and retitling the building in the name of the husband as sole owner. Which of the following statements concerning this action is (are) correct?
1.
If the husband dies first, it would be easier to qualify his estate for a Section 303 redemption of his business interest.
2.
If the husband dies first, the probate costs of his estate could be increased.
A. 2 only
B. 1 only
C. Neither 1 nor 2
D. Both 1 and 2
