3.Currently, the Dions own their personal residence as JTWROS. If instead they owned the property as tenancy by the entirety, how can this form of ownership be terminated?

I.Death, whereby the survivor takes the property.

II.Mutual agreement.

III.Divorce, which converts the estate into a tenancy in common or a joint tenancy.

IV.Severance, whereby one spouse transfers his or her interest to a third party without the consent of the other spouse.

a.IV only

b.I and III only

c.II and IV only

d.I, II, and III only

e.I, II, III, and IV

4.One of Marcels primary financial planning goals includes making lifetime gifts to his children. He would like to do this to help his children and to reduce the familys potential future estate tax liability. If he moves forward with his plan to maximize the value of the strategy, he should make gifts of property that:

I.are expected to depreciate in the future.

II.are expected to appreciate in the future.

III.have already depreciated significantly.

a.I only

b.II only

c.III only

d.I and III only

e.I, II, and III

AN ESTATE PLANNING MINI-CASE Marcel and Clio Dion are taking steps to begin evaluating their estate planning situation. Marcel is sixty years old. Clio is fifty-three years old. They have two children, ages thirteen and eighteen. Marcel is a successful executive with a Fortune 500 company, while Clio has achieved success as a cosmetics home sales trainer. Currently, Marcel's and Clio's wills state that if either Marcel or Clio were to pass away, the surviving spouse will inherit everything. Both Marcel and Clio value their privacy, but they have not established a trust at this time. Marcel and Clio have an interest in providing charitable support to their church, but they have not made any sizable contributions. Table XI.1 summarizes the asset. liability, and estate expense situation for Marcel and Clio. Table XI.1. Asset, Liability, and Expense Situation for the Dion Household Value $26,000 $20,000 $90,000 $0 Assets Checking account Savings account Money market account Other monetary assets EE/I bonds Mutual funds (basis less than fair market value) Other investment assets Primary residence Other housing assets (vacation home) Vehicles Personal property Retirement assets (e.g., 401(k) and IRA) Retirement assets (e.g., 401(k) and IRA) Other assets Life insurance (variable universal life)* Life insurance (universal life) Liabilities Mortgage on vacation home Debts Expenses Funeral and final expenses assumed the same for both *Clio is the beneficiary of Marcel's policy, and Marcel is the beneficiary of Clio's policy. $100,000 $11,720,000 $250,000 $700,000 $240,000 $86,000 $134,000 $2,768,000 $2,345,000 $48,000 $1,500,000 $250,000 Value $112,000 $86,000 Ownership JTWROS JTWROS JTWROS JTWROS JTWROS JTWROS JTWROS JTWROS JTWROS JTWROS JTWROS Marcel Clio Jointly held but not titled Marcel Clio Ownership Joint Joint Costs $25,000 AN ESTATE PLANNING MINI-CASE Marcel and Clio Dion are taking steps to begin evaluating their estate planning situation. Marcel is sixty years old. Clio is fifty-three years old. They have two children, ages thirteen and eighteen. Marcel is a successful executive with a Fortune 500 company, while Clio has achieved success as a cosmetics home sales trainer. Currently, Marcel's and Clio's wills state that if either Marcel or Clio were to pass away, the surviving spouse will inherit everything. Both Marcel and Clio value their privacy, but they have not established a trust at this time. Marcel and Clio have an interest in providing charitable support to their church, but they have not made any sizable contributions. Table XI.1 summarizes the asset. liability, and estate expense situation for Marcel and Clio. Table XI.1. Asset, Liability, and Expense Situation for the Dion Household Value $26,000 $20,000 $90,000 $0 Assets Checking account Savings account Money market account Other monetary assets EE/I bonds Mutual funds (basis less than fair market value) Other investment assets Primary residence Other housing assets (vacation home) Vehicles Personal property Retirement assets (e.g., 401(k) and IRA) Retirement assets (e.g., 401(k) and IRA) Other assets Life insurance (variable universal life)* Life insurance (universal life) Liabilities Mortgage on vacation home Debts Expenses Funeral and final expenses assumed the same for both *Clio is the beneficiary of Marcel's policy, and Marcel is the beneficiary of Clio's policy. $100,000 $11,720,000 $250,000 $700,000 $240,000 $86,000 $134,000 $2,768,000 $2,345,000 $48,000 $1,500,000 $250,000 Value $112,000 $86,000 Ownership JTWROS JTWROS JTWROS JTWROS JTWROS JTWROS JTWROS JTWROS JTWROS JTWROS JTWROS Marcel Clio Jointly held but not titled Marcel Clio Ownership Joint Joint Costs $25,000