American College HS330 Fundamentals of Estate Planning test Exam Practice Test

All the following are conditions that must be met if an otherwise nonqualified terminable interest is to qualify (as QTIP) for the federal estate tax marital deduction EXCEPT:

A widow made the following cash gifts during the current year:

Donee Amount of Gift

A qualified charity $40000

A close friend 30,000

Her sister 5,000

Her daughter 15,000

Her brother 10,000

The total amount of the taxable gifts made this year was

Important factors in assessing liquidity needs in estate planning include which of the following?

l. The types of assets that comprise the estate

II. The date of drafting the will

Which of the following life insurance settlement options will qualify for the federal estate tax marital deduction?

l. Proceeds left to the surviving spouse under the interest option, with interest payable to the surviving spouse who has the unrestricted right to withdraw proceeds and with any proceeds not withdrawn payable equally to her children per stripes

ll. Proceeds left to the surviving spouse under an installment option, with any installments remaining at her death to be commuted and paid to her estate

A man died in February of this year. Last year, when he learned that he has a terminal illness, he immediately made the following gifts and filed the required gift tax return:

Fair Market Value

Gift of listed stock to a

qualified charity $150,000

Gift of listed bonds to his wife 200,000

Gift of a boat to his son 5,000

Gift of a sports car to his daughter 5,000

What amount must be brought back to the man's estate as an adjusted taxable gift in the

calculation of his federal estate taxes?

All the following powers held by the grantor of an irrevocable trust will cause the trust assets to be brought back into the estate of the grantor EXCEPT the power to:

An individual who is a resident of State W is also the sole proprietor of a business located in State W. He owns real property located in State X that is used by the proprietorship. While on vacation in State Y, the individual meets an untimely death. Under the terms of his will, his entire estate is bequeathed to a resident of State Z. Which state will tax the real property used by the proprietorship?