Question
Your client, who has made no lifetime taxable gifts, has asked you to review her current estate plan, which disposes of her $13 million estate
Your client, who has made no lifetime taxable gifts, has asked you to review her current estate plan, which disposes of her $13 million estate as follows:
$11 million to a QTIP trust
$2 million to a power of appointment trust
Which one of the following statements regarding this estate plan is correct?
Your client needs to change the QTIP trust into a bypass trust so that she can use her full applicable credit amount.
Both of these trusts will automatically qualify for the marital deduction.
Your client will be able to use her full applicable credit amount without changing anything.
Your client can avoid having more of her estate subject to estate tax than necessary, only by having the applicable exclusion amount in the QTIP trust.
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