Exam 15: Preserving Your Estate

Estate tax liability may be reduced by a state death tax credit.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -The top federal gift and estate tax rate for 2013 is expected to be [35 | 45] percent.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -Real estate is taxed by [the state of residence | the state where the property is located].

____ would represent a second level death-related cost.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -Legal title to the property in a trust is held by the [grantor | trustee].

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -You would create a [living | testamentary] trust to be used after you die.

Inheritance tax is the same as estate tax.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -A person can give [a limited | any] number of tax free gifts per year.

The unlimited marital deduction requires the filing of a separate tax return.

Minors can handle large sums of money and property.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -If a gift tax has to be paid,the [giver | recipient] of the gift will pay it.

Which of the following qualities are essential in a trustee

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -When your die,your debts will be paid [only if you so direct in your will | because state laws protect creditors' rights].

The recipient of the gift will pay any gift tax that is due.

Using a trust can help shield an estate from using improper vehicles of transfer.

Death will erase any debts existing at that time.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -An appropriate trust to set up with a disabled child being the beneficiary would be the [Special Needs | Minor's Section 2503(c)] trust.

Most commentators believe the annual exclusion amount from estate tax will be set at $3,500,000 for 2013.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -When a father deposits cash in a bank account held jointly with his daughter,a gift is made with the [father's deposit | daughter's withdrawal].

You should review your estate plan every