Question 1 Question Assume Maria and Julian wanted to establish college funds for each of the grandchildren. Which of the following statements would be true?

An appropriate planning technique for both Elizabeth and Javier's family would be to place the assets into two family trusts, one for Elizabeth's children (with Elizabeth and Scott as joint trustees) and one for Javier's children (with Catherine as the trustee).

An irrevocable trust would be a completed gift for gift tax and estate tax purposes.

The transfers would not be subject to GSTT, regardless of the amount or to whom the money is paid, because the payments were made for education.

If Julian and Maria found out about Melanie and wanted to establish a fund for her as well, then any transfer to Melanie would be subject to GSTT.

2. Assume Julian died in 2021. Which filing status can Maria use on her 2021 income tax return?

Married Filing Jointly.

Head of Household.

Qualifying Widow.

Single.

3. Assume Julian died in 2021. Which filing status can Maria use on her 2022 income tax return?

Single.

Married Filing Jointly.

Qualifying Widow.

Head of Household.

4. Assume Julian died today and Keith is appointed executor. Of the following, which is not an available election Keith can make before he files Julian's estate tax return?

Selection of the income tax year end for Julian's estate.

Deducting the expenses of administering Julian's estate on the estate tax return (Form 706).

Utilizing the annual exclusion against testamentary transfers.

Electing the QTIP election on property passing to Maria.

5. Assume Julian died today, Keith is appointed executor, and the estate does not have sufficient cash to pay the required taxes or expenses. Of the following statements, which is not true regarding selling an estate's assets to generate cash?

Group of answer choices

The estate may have income tax consequences.

The assets may not be sold at full, realizable fair market value.

Any losses on the sale of the assets are deductible as losses on the estate tax return.

Any selling expenses are deductible on the estate tax return.

The Lopez Case MARIA AND JULIAN LOPEZ BACKGROUND Maria and Julian Lopez, both age 63, have been married for 40 years, are both in good health, and they are citizens and residents of New Mexico. They expect to work until age 66 to 70. Maria and Julian live in a community property state. They have the following children and grandchildren: Children Age Grandchildren Elizabeth 40 4 children (ages 15, 14, 13 & 12) Javier 35 3 children (ages 5, 3 & 1) Lisa Deceased 1 child Elizabeth, an estate planning attorney, is married, healthy, and happy. Maria and Julian adore Elizabeths husband, Scott, and their four children. Javier, a high-net-worth investment consultant, was recently divorced and his ex-wife, Catherine, has custody of their three children. Maria and Julian never quite cared for Catherine, as she always seemed to be quite snooty. Since the divorce, the relationship between Maria and Catherine has been very strained. Since his divorce, Javier has had somewhat of a mid-life crisis. He recently rented a penthouse apartment and bought a new Jaguar. Javier has also been dating Natalia, a 21-year-old swimsuit model. While Maria and Julian are confident that this is only a passing phase, they are concerned about giving any gifts outright to Javier or his children. Lisa, Maria and Julians third child, was a bit of a wild child. Lisa died in a tragic motorcycle accident in her senior year of college while on her way home to tell her parents about a big secret she had been keeping. The summer before, Lisa had given birth to a baby girl named Melanie. At the time, Lisa gave the baby to the babys father, an older married man, although no official adoption was ever transacted. Maria and Julian still do not know about Melanie. Maria and Julian own Peas & Kumquats, a popular organic health food store in a general partnership with another couple located in New Mexico. Scott, Elizabeths husband, has worked at the store since he was a kid. Scott is now one of the store managers who continues along with the other partners to direct the company as executives. Maria and Julian would like to reward Scott for all of his hard work by giving Scott and Elizabeth 3/4 of their interest in the business and giving the remaining 1/4 of their interest in the business to Javier. They do not want Javier to have any control over the business, just to have an income interest. Elizabeths youngest child, Andrew, was born with a serious physical disability. To provide additional support for Andrew, Julian created an irrevocable trust with Andrew as the sole beneficiary with an $8,015,000 transfer of separate property 5 years ago. The trust meets the requirements of Section 2503(c). Assume for any calculation of GSTT that the annual exclusion was $14,000 and the lifetime exemption was $11,700,000. Also assume that the GSTT and gift tax rates were 40% for determination of GSTT even though they were paid 5 years prior.