3. Assuming "adjusted taxable gifts" (706, line 4) is $50,000, the largest net estate a person dying in 2007 can transfer his children without incurring a transfer tax is $1,950,000.

True

False

5. Which of the following are true statements regarding testamentary trusts? (1)The funding mechanism is the probate process. (2)Prior transfer credit will not be available if this type of trust is utilize. (3)It can have almost all of the characteristics of a living trust, such as an AB or an ABC plan. (4)If it lasts longer than 21 years after the testator's death, it will violate the rule against perpetuities.

(1), (2), and (4) only are correct.

(4) only is correct.

(1) and (3) only are correct.

All are correct.

(2) and (4) only are correct.

6. Young wealthy clients who expect to outlive the estate tax (i.e., expect it to be gone in 2010 and they"ll still be here), and who would leave everything to the surviving spouse without any strings attached if it were not for estate taxes, are most likely to choose which of the following estate plans?

The ABdC Trust plan

The AB Trust plan

The AdB Trust plan

The ABC Trust plan

The A-superB Trust plan