Estate planning

use your Office product is inactive. To use for free, sign in and use the Web version. Activate Use free at Office.com 9. Lyle established a revocable trust six years ago and named the trust the beneficiary of his life insurance policy. Lyle's wife and child are the beneficiaries of the trust. The proceeds paid to the trust at Lyle's death will not be included in his gross estate. 10. In a dynasty trust, once life insurance proceeds are paid to a trust, beneficiaries receive discretionary income distributions with a limited power of appointment over trust corpus. 11. A credit shelter trust can be the beneficiary of a life insurance policy when an insured spouse dies. Multiple Choice: 12. Hugh created an irrevocable trust five years ago and transferred a $4 million whole- life policy to the trust. His wife, Meryl, will receive the income for life, with the remainder payable to her estate. What is the consequence of this transfer? A. Hugh and Meryl can offset the taxable amount of the premiums with gift- splitting and annual exclusions. B. Assuming Meryl survives Hugh, only the trust's remainder interest is includable in her estate. C. When Hugh transferred the policy to the trust, he could not offset the gift tax with a marital deduction. D. Hugh can borrow from the policy's cash value without adverse tax consequences