Administration Of Wills/Trusts/ And Estates
5th Edition
ISBN: 9781285281308
Author: Brown
Publisher: Cengage
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Cora, 79, has an estate that includes her personal residence valued at $120,000 and $18,000 in a bank account that is solely in her name. She would like to arrange her estate so that she maintains exclusive control of the assets during her lifetime, but at her death the assets will pass to her friend, Mabel, outside of probate.
Based on Cora's goals and situation, which of the following are correct statements about will substitutes that she could use?
She should put her bank account in tenancy in common with Mabel.
She should title her personal residence in joint tenancy with her friend, Mabel.
She should execute a will that names her friend, Mabel, as the legatee of the bank account and the devisee of the personal residence.
She should place the bank funds in a payable on death (POD) account with Mabel as beneficiary.
She should change the title on her personal residence to indicate a life estate reserved for her lifetime and a remainder to her friend, Mabel.
A)IV and V…
Jamal, who lives in a common law state, would like to place his new bride on the deed to a residence that is currently in his own name. His goals regarding this residence and the transfer are:
He does not want the transfer to cause him to use any of his gift tax applicable credit amount.
He wants to be able to use the annual exclusion for the transfer.
He wants the survivor of himself and his wife to receive title to the deceased spouse's interest in the residence.
He does not want his wife to be able to convey her interest in the residence without his consent.
He does not want more than 50% of the fair market value of the house to be included in his gross estate if he is the first to die.
On the death of the first spouse, he does not want the residence to be subject to a probate proceeding.
What is the most appropriate way for Jamal to title the residence when he makes the transfer?
A)
Tenants by the entirety
B)
Tenants in common with equal interests
C)
Jamal as the…
Under intestacy laws, if Darlene has no heirs, then the property of her estate
a.
is held in trust for future beneficiaries.
b.
devolves to a preselected charity.
c.
passes to a person designated by a probate court.
d.
is transferred to the state.
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- In 2001, Heather created a trust with income to her partner Gina for life, remainder to her daughter, Sonia, if living, and if Sonia is not living then to Heather if Heather is living, and if Heather is not living, then to granddaughter Beth or Beth's estate. In 2011, while all parties remain alive, Heather transfers her contingent interest to Beth, relinquishing all rights and interest in the property. In 2013, Heather dies, predeceasing Gina, Sonia, and Beth. What are Heather's estate tax consequences, if any? No Inclusion Inclusion in Grantor's gross estate pursuant to 2033 Inclusion in Grantor's gross estate pursuant to 2035 Inclusion in Grantor's gross estate pursuant to 2036 Inclusion in Grantor's gross estate pursuant to 2037 Inclusion in Grantor's gross estate pursuant to 2038arrow_forwardJack and Liz live in a community-property state and their vacation home is community property. This year they transferred the vacation home to an irrevocable trust that provides their son, Tom, a life estate in the home and the remainder to their daughter, Laura. Under the terms of the trust, Tom has the right to use the vacation home for the duration of his life, and Laura will automatically own the property after Tom's death. At the time of the gift, the home was valued at $500,000, Tom was 35 years old, and the 57520 rate was 5.4 percent. Use discount tables Exhibit 25-4, Required: a. What is the amount, if any, of the taxable gifts? b. Would your answer be different if the home was not community property and Jack and Liz elected to gift-spilt? Complete this question by entering your answers in the tabs below. Required A Required B What is the amount, if any, of the taxable gifts? Taxable gift to Laura by each Trocable gift to Tom by each Amount $ 33,520 $ 27,000 Required>arrow_forwardDanny and Julie, a married couple, decided to sell their community property home in a community property state, and reinvest their sale proceeds in a new home in a common law state with only Julie's name on the title. Which statement below is correct? A) The new home will be considered community property, but only if Julie places Danny’s name on the title as tenancy by the entirety. B) The new home will be considered the separate property of Julie. C) The new home will be considered community property. D) Danny would have rights to only the sale proceeds from their prior home.arrow_forward
- If included in a married client's will, which of the following testamentary trusts can qualify for the marital deduction? One where the income produced by the trust is to go equally to the surviving spouse and children for the spouse's life. Upon the surviving spouse's death, the corpus passes to the children in equal shares. One where the income produced by the trust is to go to the surviving spouse for his life. Upon the surviving spouse's death, the corpus passes to the children in equal shares. The executor of the estate can elect to treat the property as qualified terminable interest property (QTIP). One where the income produced by the trust is to go to the surviving spouse for his life. The surviving spouse can invade the corpus at any time and can consume the entire corpus at his discretion. One where the income produced by the trust is to be accumulated. In the discretion of the trustee, a part of the income may be distributed to the surviving spouse. The surviving spouse has…arrow_forwardDick and Karen are married and live in a community property state. All of their property is also located in this state, except for an undeveloped parcel of land left to Dick by his uncle in a common law state. Dick and Karen have three minor children. Dick and Karen both have wills that leave everything to the survivor, and if there is no survivor, then to the children equally. Each will appoints the other spouse as personal representative (PR). Dick's brother was appointed as guardian of the minor children. Dick's brother has since died. After analyzing Dick and Karen's current estate plan for weaknesses, which one of the following statements is NOT correct? A) Their estates may be subject to their state intestacy statutes to appoint a PR in the event of simultaneous death. B) A guardianship and/or conservatorship proceeding will be necessary for the minor children. C) Dick's estate will require an ancillary probate proceeding. D) The wills are irrelevant…arrow_forwardBret died and was survived by his wife, Anne, and two adult children. Bret's will provided for the maximum estate tax applicable exclusion amount for the year of death to be placed into a family bypass trust, in which Anne and the children were named as income beneficiaries, with the children to receive equal shares of the trust assets upon Anne's death. The will provided that the remainder of Bret's estate was to be placed in a power of appointment trust. Bret did not make any lifetime taxable gifts. Assume that no federal estate tax deductions other than the marital deduction were taken. Which of the following are CORRECT statements about the federal estate tax implications of the estate planning techniques contained in Bret's will? Bret's taxable estate will be zero, but his tax base will be the maximum estate tax applicable exclusion amount. Anne's interest in the family bypass trust is considered to be a terminable interest; thus, assets placed in this trust will not be entitled…arrow_forward
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