24. Which of the following is not an advantage of an Irrevocable Life Insurance Trust (ILIT)?

1. An ILIT removes the death benefit from the grantor-insureds estate.
2. An ILIT can shelter insurance proceeds and future appreciation from the surviving spouses gross estate if the trust is structured properly.
3. Insurance proceeds paid to an ILIT are protected from the decedents creditors.
4. The grantors life insurance policy is irrevocable assigned to the trust and the grantor has no further control over the policy.

25. Which of the following best describes the benefit of a Crummey power?

1. A Crummey power allows gifts to a trust to be treated as annual exclusion gifts.
2. A Crummey power allows the grantor of an ILIT to take loans from the life insurance policy.
3. A Crummey power allows the grantor of an ILIT to modify the beneficiaries under the ILIT.
4. A Crummey power allows a trustee to make distributions under an ascertainable standard.

27. Carl is the owner and the insured of a whole-life insurance policy with a death benefit of $2 million. His wife Gale is the named beneficiary of the policy. Upon Carls death, which of the following is correct:

1. $2 million will be includible in Carls probate estate.
2. $2 million will be includible in Carls gross estate.
3. Carls gross estate will receive an offsetting marital deduction of $2 million since his wife Gale is the named beneficiary.
4. Gale will owe income taxes at her current tax rate on the $2 million in insurance proceeds.

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