Taxation

In the 3-Trust Estate Plan, each of the 3 trusts serve a specific purpose. Select the description that best matches each of the trusts.

Questtion 1 In the 3-Trust Estate Plan, each of the 3 trusts serve a specific purpose. Select the description that best matches each of the trusts. Trust A A. Bypass or Credit Shelter Trust Trust B Trust C B. None of the other answers is correct C. QTIP(able) Trust Question 2 Decedent died in 2012 with an estate valued at 9,000,000. Decedent had made no taxable gifts in any D. years prior to his death. At the time of Decedent's death, his Trust owned property worth Second Spousal Widow $2,500,000. Decedent had an AB Trust Estate Plan. Determine the amount at which each trust will be funded E. Trust A Trust B Second Bypass Trust F. Spousal Trust A. $5,120,000 B. $11,500,000 C. $6,380,000 D. None of the other answers is correct E. $3,880,000 Question 3 Decedent died in 2013 with an estate valued at 20,000,000. Decedent had made (pre-2011) taxable gifts that totaled $3,500,000. At the time of Decedent's death, his Widow owned property worth $4,000,000. Decedent had an ABC Trust Estate Plan. Determine the amount at which each trust will be funded. Trust A will be funded at Trust B will be funded at Trust C will be funded at A. $14,750,000 B. $15,750,000 C. $4,000,000 D. None of the other answers is correct E. $19,750,000 F. $4,250,000 G. $5,250,000 Question 4 In 2012, Decedent died with an estate valued at $10,000,000. His ABC Trust Estate Plan as follows - Trust A, $5,000,000 Trust B, $5,120,000 Trust C, $4,880,000 For each of the following independent situations, determine the QTIP fraction that will be elected with respect to the trust in the situation. Decedent's executor wishes to defer all estate taxes until Decedent's Widow dies. The QTIP fraction that should be elected for the B Trust is - Decedent's executor wishes to defer all estate taxes until Decedent's Widow dies. The QTIP fraction that should be elected for the C Trust is - Decedent's executor wishes to equalize the taxable estates of Decedent and his Widow. The QTIP fraction that should be elected for the C Trust is - Decedent's executor wishes to Decedent's taxable estate equal $7,000,000. The QTIP fraction that should be elected for the C Trust is - A. $2,500,000/$4,880,000 QTIP fraction should be elected B. $3,000,000/$4,880,000 QTIP fraction should be elected C. $4,880,000/$4,880,000 QTIP fraction should be elected, i.e., a 100% QTIP election D. None of the other answers is correct E. No QTIP election should be made. The C Trust is never QTIP'd F. No QTIP election should be made. The B Trust is never QTIP'd Question 5 Lenore died on June 1, 2012, with a gross estate that totaled $15,000,000. Lenore has an A-superB Estate plan that is funded at her death.. Lenore's husband receives an income interest for life (i.e., life estate) in the superB Trust, which makes that trust QTIP'able. Lenore's husband owned property worth $1,000,000 and was in poor health. Answer each of the following questions that relate to this situation. What is the latest date that Lenore's estate tax return can be filed? What is the latest date that Lenore's executor can make the QTIP election with respect to Lenore's estate? At the time that Lenore's executor has to make the QTIP election, the husband's health has declined to the point that he is not expected to live more than a few months more. Under these circumstances, to what extent should Lenore's executor make the QTIP election (i.e., what QTIP fraction)? At the time that Lenore's executor has to make the QTIP election, the husband's health has improved to the point that he is expected to live for many more years (i.e., at least 20 years more). Under these circumstances, to what extent should Lenore's executor make the QTIP election (i.e., what QTIP fraction)? A. $15,000,000/$15,000,000 QTIP fraction should be elected, i.e., 100% QTIP election, which results in Lenore's estate owing no estate tax B. No QTIP election should be made, which allows Lenore's estate to pay her estate tax and husband's estate to pay his estate tax. C. $7,000,000/$15,000,000 QTIP fraction should be elected, which results in equalizing the two taxable estates D. March 1, 2013 E. $4,120,000/$15,000,000 QTIP fraction should be elected, which increases husband's taxable estate to an amount that equals his AEA F. $9,880,000/$15,000,000 QTIP fraction should be elected, which results in Lenore's taxable estate equaling her AEA and defers all estate taxes until the husband dies. G. None of the other answers is correct H. April 15, 2013 I. September 1, 2013