21. Graham was the owner and the insured of a $3 million life insurance policy and his wife Karen was the beneficiary. At Grahams death, Karen disclaimed all of the proceeds that subsequently passed from his estate to a bypass trust. Which of the following statements is correct?

1. The $3 million death benefit is included in Grahams estate and the proceeds qualify for a marital deduction.
2. The $3 million death benefit is not included in Grahams estate because the proceeds passed to a bypass trust.
3. The $3 million death benefit is included in Grahams estate and the proceeds do not qualify for a marital deduction.
4. The $3 million death benefit is not included in Grahams gross estate because Karen has forfeited all rights to the proceeds.

22. Which of the following is not a benefit associated with a Family Limited Partnership?

1. Retention of assets within the family unit through rights of first refusal.
2. Ability to shift income to a lower income tax bracket family member.
3. Ability to transfer LP interests to family members to take advantage of discounts to reduce the potential gift tax liability.
4. The General Partner assumes no personal liability for debts and other liabilities of the FLP that are not satisfied by FLP assets.

23. Which of the following are a discount reducing the value of an interest in a family limited partnership?

1. Minority Discount
2. Majority Discount
3. Marketability Discount
4. Management Discount

1. 1 and 2
2. 1 and 3
3. 1, 2 and 3
4. 2, 3, and 4