4) Johnny bench sets up an irrevocable trust. He funds it with 1,000,000 .He makes Joe Morgan the trustee. Joe Morgan is given a power of appointment The power of appointment allows Joe Morgan to appoint the corpus to any of the following: Himself, Ken Griffey Sr, Bill Plummer, or Ray Knight If not appointed to any of the above then to the taker by default: Steve Garvey The power of appointment is limited to disbursements for ascertainable standards of health education or support . Joe Morgan dies. He never appointed the money to anyone What amount is included in his estate? What if he had appointed $50,000 to himself and it was in his bank account ? What if we add happiness ?

4) Johnny bench sets up an irrevocable trust. He funds it with 1,000,000 .He makes Joe Morgan the trustee. Joe Morgan is given a power of appointment The power of appointment allows Joe Morgan to appoint the corpus to any of the following: Himself, Ken Griffey Sr, Bill Plummer, or Ray Knight If not appointed to any of the above then to the taker by default: Steve Garvey The power of appointment is limited to disbursements for ascertainable standards of health education or support . Joe Morgan dies. He never appointed the money to anyone What amount is included in his estate? What if he had appointed $50,000 to himself and it was in his bank account ? What if we add happiness ?

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter19: Family Tax Planning

Section: Chapter Questions

Problem 16CE

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Joseph is the sole trustee of a trust fund of $1,000,000. By the terms of the trust, he is under a duty to invest the money ‘as if he were absolutely entitled to the assets of the trust’. He is approached by Ronald, an investment broker, who offers to pay him $100,000 ‘no questions asked’ if he invests the trust fund with him. Joseph agrees, and is paid the $100,000. Ronald invests the $1,000,000 on the stock market, eventually making a loss of $700,000. With only $300,000 remaining, Joseph is now insolvent and Ronald has fled the country. Advise the beneficiaries of the trust.
Richard is the trustee of the Williams family Trust. Last year he directed Steve a broker, to purchase an unauthorized investment for the Trust. Both Richard and Steve realized that the investment was unauthorized, but both thought the trust investment clause was too restrictive. Furthermore, David a solicitor, advised Richard that so long he was taking risk in the best interest of the beneficiaries, he would be protected by the trustee exemption clause in the trust instrument. He also advised Steve that it would be very unlikely for the court not to exonerate him as well even though not being a trustee, he did not have a specific protection of the clause. Richard and Steve proceed with the investment in good faith, Steve taking a $10,000 brokerage fee. The investment which was initially worth US$100,000 is now worth US$ 50,000 after just 3 weeks from the date of the unauthorized change. Advise the beneficiaries.
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The Flower Family Trust is a discretionary trust created by Graeme Flower (the trustee) in 2012 for the benefit of his children and grandchildren. During the year ended 30 June 2021 the Flower Family Trust has net income of $75,000. The trustee exercises his discretion to allocate $40,000 of the net income to Paula Flower who is 35 years of age and lives in a nursing home after suffering brain 2 damage from a car accident four years ago. The balance of net income is not allocated to any beneficiary. Question Advise Graeme Flower of any tax obligations he has as trustee in respect of the net income of the trust for the year ended 30 June 2021.
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Melanie owns units of a mutual fund. She receives a cash distribution of $100 from the fund. She believes that she will not be taxed on the distribution if she reinvests it in additional units of the fund. Is she right? a) Yes b) Yes, but only if the mutual fund is constituted as a trust c) Yes, but only if the mutual fund is constituted as a corporation d) No Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
The trustee of the Spratt Trust has the discretion to distribute the income or corpus of the trust in any proportion between the two beneficiaries of the trust, Edwin and Dolly. Under the trust instrument, Edwin must receive $20,000 from the trust every year. In the current year, the trust's accounting income is $100,000, and its DNI is $90,000. In addition to the required $20,000, the trustee pays Edwin $30,000 and Dolly $50,000. What amount income is recognized by the beneficiaries as the result of the distributions? Round any division to three decimal place and use in subsequent computations. If an amount is zero, enter "0". a. Edwin: First-tier Distribution of $fill in the blank 1 and Second-tier Distribution of $fill in the blank 2.b. Dolly: First-tier Distribution of $fill in the blank 3 and Second-tier Distribution of $fill in the blank 4