Which one of the following transfers made this year by 85-year old Jennifer is not sooner or later subject to the Generation Skipping Transfer Tax?

a. A gift of a remainder interest in a trust just established which is paying an income interest to Jennifer. The remainderman is a grandson whose parents died in an auto accident earlier this year before the inception of the trust.

b. A transfer by Jennifer of $15,000 to a UTMA account established by her son for Jennifer's granddaughter.

c. An irrevocable trust which pays income to Jennifer for 10 years and then pays the remainder to her grandniece who is only 25 years younger than Jennifer.

d. An irrevocable trust which pays income to Jennifer's daughter for life, then distributes the remainder to the grandchild of a friend and that grandchild is currently 31 years old.

Which of the following is not necessary to properly execute a Section 303 stock redemption?

a.

The value of the stock must be greater than 35% of the decedent's adjusted gross estate, including gifts made in the last 3 years.

b.

The 303 redemption can only be used if the corporation has the cash to redeem the shares.

c.

The 303 redemption can be made without a positive earnings and profits account.

d.

The Section 303 redemption is limited to an amount that cannot exceed the death taxes of the estate, plus funeral and administrative expenses for which the decedent is liable.

The Generation Skipping Transfer Tax (GSTT) has all the following characteristics, except:

a.

GST gifts to direct skips qualifying for the annual exclusion are not subject to the tax.

b.

Assets transferred to a trust that has a grandchild as the sole beneficiary may be subject to both gift and generation skipping transfer tax.

c.

If all the children of a trust are grandchildren (whose parents are living) of the grantor then the trust is subject to GSTT.

d.

A 'skip person' is a person who is one or more generations younger than the transferor.

Elizabeth, a widow, has decided to set up trusts for each of her four grandchildren to

take advantage of the generation skipping transfer tax exemption. In the current year, she gives each grandchild $280,000. If Elizabeth has not made any previous taxable gifts, on what amount will she owe gift tax?

a.

$266,000.

b.

$280,000.

c.

$1,064,000.

d.

None.

Which statement(s) is/are true for Generation Skipping Transfer Tax (GSTT)?

Applies to transfers to persons who are two generations or more lower than the transferor.

There are no exceptions.

There is a $5,450,000 lifetime exemption in 2016 for GSTT.

Transfers qualifying for gift tax annual exclusion are also excluded from GSTT.

Choose the answer(s) which is/are most correct:

a.

4 only.

b.

1 and 4.

c.

2 and 3.

d.

1, 3 and 4.

Brenda has a large estate of $6,000,000. Her husband, Richard, is a great husband and father, but cannot manage money. Brenda wants to make sure Richard has sufficient income to live on after her death if she predeceases him, but does not want him to have unfettered access to the principal. She wants her three children to receive equal shares of her estate at Richard's death. Which is the most appropriate technique to use for her estate plan?

a.

Put all assets in an "A" trust.

b.

Put all assets into a QTIP trust.

c.

Create a credit shelter trust (B) equal to the exemption equivalent (with a provision for no invasion of principal) with the balance going into a QTIP trust, each with an outside trustee.

d.

Place the entire estate into an estate trust.

What is the appropriate estate planning strategy for married couples to minimize taxes over the death of both spouses?

a.

Bequeath the entire estate to a trust, giving the surviving spouse a general power of appointment over the assets at her death.

b.

Bequeath the applicable exemption equivalent amount to a qualified terminable interest property trust (QTIP) and the balance outright to the surviving spouse.

c.

Bequeath the applicable exemption equivalent amount to a bypass trust and the balance to the surviving spouse in a qualifying way.

d.

Bequeath the applicable exemption equivalent amount to the surviving spouse and the balance to the children.

Although he has a vast fortune, Mickey has decided not to prepare an estate plan because he believes that his surviving family members will divide up his assets appropriately. Which of the following is not a risk associated with failing to plan an estate?

a.

Mickey's estate may incur excessive transfer taxes.

b.

Mickey's favorite Corvette may not be transferred to his ex-wife, Stacey.

c.

Mickey's insurance policy on his own life may not be paid out to the named beneficiary.

d.

Mickey's current wife, Odessa, may not provide for Mickey's children from a previous marriage.