Beth is a widower who consulted Gary, a CFP professional, for advice with respect to her financial and estate planning goals. Beth told Gary that she has just updated her estate plan and has executed a will and a trust, a durable power of attorney, health care power of attorney and a health care proxy. Beth reports that she is the trustee of her trust while she is alive and has named her son Carter as the successor trustee. She also reports that she is a trust beneficiary while she is alive. Beth does not understand her estate plan and wants Gary to help her understand it.

Which of the following statements that Gary makes to Beth is correct?

I.Beth has executed a revocable trust and she may change the terms of her trust at any time.

II.Any assets that Beth places in the trust during her lifetime will not be subject to probate and will not be included in her taxable estate at her death.

III.If Beth becomes incapacitated and Carter serves as successor trustee, she has made a taxable gift to Carter.

IV.The durable power of attorney will allow Carter to assume management of any trust owned assets when Beth becomes incapacitated.

A.I & II

B.II & III

C.I, II, & III

D.I, III, & IV