1.Which of the following statements concerning an irrevocable trust is (are) correct?

I. A transfer of property to an irrevocable trust is ineffective for the purpose of reducing the grantors gross estate

II. An irrevocable trust is treated as a completed gift for tax purposes at the time of the transfer.

a) I only b) II only c) Both I and II

d) Neither I nor II

2. A person dying without a valid will generally lose which of the following capabilities?

I. the right to name guardians of minor children

II. the right to name a personal representative

a) I only b) II only c) Both I and II d) Neither I nor II.

3. Mrs. Jones would like to buy more life insurance but wants to avoid inclusion of the insurance in her gross estate at death. If Mrs. Jones creates an irrevocable trust to apply for the life insurance policy, which of the following trust terms is (are) recommended?

I. a provision for Mrs. Jones to replace the trustee

II. a provision directing the trustee to pay Mrs. Joness estate taxes

a) I only

b) II only

c) Both I and II

d) Neither I nor II

4. A husband and wife own an office building as joint tenants with the right of survivorship. The building has an estate tax value of $11.5 million. If they dissolve the joint tenancy and retitle the property in the name of the husband as sole owner, which of the following statements is (are) correct?

I. If the husband dies first and leaves the office building outright to his wife, there will be no federal estate tax attributed to its inclusion in his gross estate.

II. If the wife dies first, their children, as sole heirs, will get a stepped-up tax basis for the property at their fathers subsequent death.

a) I only

b) II only

c) Both I and II

d) Neither I nor II