American College Fundamentals of Estate Planning test Sample Questions:
1. Which of the following statements concerning a grantor-retained annuity trust (GRAT) is (are) correct?
1.The grantor is taxed on trust income during the retained term.
2.The grantor makes an irrevocable transfer to the remainderperson(s) when the trust is created.
A) Both 1 and 2
B) 2 only
C) 1 only
D) Neither 1 nor 2
2. The following are facts concerning a decedent's estate:
*Taxable estate $1,700,000
*Pre-1977 taxable gifts 200,000
*Post-1976 adjusted taxable gifts 50,000
*Post-1976 gifts made to a qualified charity 100,000
The tentative tax base of this estate is
A) $1,900,000
B) $1,750,000
C) $1,700,000
D) $1,850,000
3. The executor of an estate has a choice of waiving the executor's fee. Factors that should be considered by the executor in making this choice include all the following EXCEPT
A) the income tax brackets of the other beneficiaries
B) the estate tax bracket of the estate
C) the income tax bracket of the executor
D) whether the executor is otherwise a beneficiary of the estate
4. Which of the following statements concerning ownership of property under a tenancy by the entirety is correct?
A) It is a form of property ownership available only to married persons.
B) One tenant can freely transfer his or her property interest to a third person.
C) The property will be in the probate estate of the first joint tenant to die.
D) It is a form of property ownership that applies only to personal property.
5. Many trust instruments provide for the removal of the original trustee. Valid reasons for removing the original trustee include which of the following?
1.A shift in trust situs is desirable because of changes in law.
2.The beneficiary has moved his or her residence to a distant state.
A) Both 1 and 2
B) 2 only
C) 1 only
D) Neither 1 nor 2
Solutions:
| Question # 1 Answer: A | Question # 2 Answer: B | Question # 3 Answer: A | Question # 4 Answer: A | Question # 5 Answer: A |
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