20. David, upon passing, had a cottage, stocks, bonds, and other assets that appreciated over his lifetime. David carried sufficient life insurance to mitigate any estate tax burden. Which statement regarding taxation is most accurate as it relates to David and his children to whom the assets will be equally distributed? David's estate will not be taxed during his year of death because the executor will be responsible personally for his tax expenses David's estate will be taxed only on any income he earned during the year, but not on capital gains because they were never sold David's children will be responsible for all estate tax expenses as the next to kin David's estate will be taxed on capital gains resulting from deemed dispositions; his children will not pay taxes on assets inherited David's children will be taxed at their respective marginal tax rates upon distribution of the assets by the executor, based on market values 21. In estate planning, which statement regarding trusts is FALSE? Trusts can be used effectively to avoid the probate process With alter ego trusts, the beneficiary and settlor are the same person OMultiple testamentary trusts may be treated as one trust for tax purposes where the beneficiary is the same individual Olnter-vivos trusts are taxed at the same marginal tax rates as an individual OThrough testamentary trusts, it may be possible to access lower tax brackets multiple times for the beneficiaries 22. Stephanie decided that she prefers to simply hand-write her Will. She will ensure it is dated and essentials to express her desires are clearly expressed. She does not anticipate any witnesses will be present upon signing. Which statement regarding Stephanie's thoughts about drawing up a will is most reasonable? Stephanie's Will would only be valid if she ensures two witnesses are present to sign it along with her. Her desire to dispense with witnesses would invalidate the Will. Stephanie's Will must be prepared in typewritten format to ensure legibility - hand-written Wills are void upon preparation. Stephanie's Will would not likely be acceptable by law because it is not prepared by a lawyer. Stephanie's Will is likely to be acceptable by law, but it is advisable that at least one of the heirs specified within the will witnesses her signature. Stephanie's Will is likely to be acceptable by law. As a holographic will, no witnesses are required provided it is all written in her own handwriting, she signs it, and all legal requirements are met. 20. David, upon passing, had a cottage, stocks, bonds, and other assets that appreciated over his lifetime. David carried sufficient life insurance to mitigate any estate tax burden. Which statement regarding taxation is most accurate as it relates to David and his children to whom the assets will be equally distributed? David's estate will not be taxed during his year of death because the executor will be responsible personally for his tax expenses David's estate will be taxed only on any income he earned during the year, but not on capital gains because they were never sold David's children will be responsible for all estate tax expenses as the next to kin David's estate will be taxed on capital gains resulting from deemed dispositions; his children will not pay taxes on assets inherited David's children will be taxed at their respective marginal tax rates upon distribution of the assets by the executor, based on market values 21. In estate planning, which statement regarding trusts is FALSE? Trusts can be used effectively to avoid the probate process With alter ego trusts, the beneficiary and settlor are the same person OMultiple testamentary trusts may be treated as one trust for tax purposes where the beneficiary is the same individual Olnter-vivos trusts are taxed at the same marginal tax rates as an individual OThrough testamentary trusts, it may be possible to access lower tax brackets multiple times for the beneficiaries 22. Stephanie decided that she prefers to simply hand-write her Will. She will ensure it is dated and essentials to express her desires are clearly expressed. She does not anticipate any witnesses will be present upon signing. Which statement regarding Stephanie's thoughts about drawing up a will is most reasonable? Stephanie's Will would only be valid if she ensures two witnesses are present to sign it along with her. Her desire to dispense with witnesses would invalidate the Will. Stephanie's Will must be prepared in typewritten format to ensure legibility - hand-written Wills are void upon preparation. Stephanie's Will would not likely be acceptable by law because it is not prepared by a lawyer. Stephanie's Will is likely to be acceptable by law, but it is advisable that at least one of the heirs specified within the will witnesses her signature. Stephanie's Will is likely to be acceptable by law. As a holographic will, no witnesses are required provided it is all written in her own handwriting, she signs it, and all legal requirements are met