Your client is terminally ill. Her potential gross estate, valued at $12.9 million, includes the following assets: A life insurance policy on her life, with a death benefit of $500,000; her deceased husband is the named beneficiary A general power of appointment (valued at $500,000) over the assets of a trust established by her husband; her children are the designated remaindermen of the trust A $500,000 retained life estate in the family residence Your client also expects to receive a $500,000 bequest within the next four months from her deceased sister's estate; the client's children are the contingent beneficiaries of the bequest. Your client would like to transfer a portion of her estate to her two children while she is alive to reduce her potential estate tax liability to the greatest extent possible. Which one of the following exclusion techniques would be the most appropriate to reduce the value of your client's potential gross estate? A) release her general power of appointment over the trust B) transfer the retained life estate to her children C) transfer the life insurance policy to her children D) disclaim the inheritance before accepting any benefits
Your client is terminally ill. Her potential gross estate, valued at $12.9 million, includes the following assets: A life insurance policy on her life, with a death benefit of $500,000; her deceased husband is the named beneficiary A general power of appointment (valued at $500,000) over the assets of a trust established by her husband; her children are the designated remaindermen of the trust A $500,000 retained life estate in the family residence Your client also expects to receive a $500,000 bequest within the next four months from her deceased sister's estate; the client's children are the contingent beneficiaries of the bequest. Your client would like to transfer a portion of her estate to her two children while she is alive to reduce her potential estate tax liability to the greatest extent possible. Which one of the following exclusion techniques would be the most appropriate to reduce the value of your client's potential gross estate? A) release her general power of appointment over the trust B) transfer the retained life estate to her children C) transfer the life insurance policy to her children D) disclaim the inheritance before accepting any benefits
Chapter11: Investor Losses
Section: Chapter Questions
Problem 47P: LO.2, 3, 7, 11 Kristin Graf (123 Baskerville Mill Road, Jamison, PA 18929) is trying to decide how...
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Question #59 of 85
Question ID: 1251855
Your client is terminally ill. Her potential gross estate, valued at $12.9 million, includes the following assets:
- A life insurance policy on her life, with a death benefit of $500,000; her deceased husband is the named beneficiary
- A general power of appointment (valued at $500,000) over the assets of a trust established by her husband; her children are the designated remaindermen of the trust
- A $500,000 retained life estate in the family residence
Your client also expects to receive a $500,000 bequest within the next four months from her deceased sister's estate; the client's children are the contingent beneficiaries of the bequest. Your client would like to transfer a portion of her estate to her two children while she is alive to reduce her potential estate tax liability to the greatest extent possible.
Which one of the following exclusion techniques would be the most appropriate to reduce the value of your client's potential gross estate?
A)
release her general power of appointment over the trust
B)
transfer the retained life estate to her children
C)
transfer the life insurance policy to her children
D)
disclaim the inheritance before accepting any benefits
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