PART 4—STUDY QUESTIONS

1. Of what value is the inventory of assets section of the completed fact finder form for the estate planner?

 2. Why might the interview process between the estate planner and the client be uncomfortable for the client?

3. Define each of the following ways in which an individual might have an ownership interest in property:

a. fee simple ownership

b. life estate

c. term interest

d. future interest

4. Define each of the following ways in which two individuals might have a joint concurrent ownership interest in property:

a. tenancy in common

b. joint tenancy with right of survivorship

c. tenancy by the entireties

d. community property

5. Differentiate among the following powers:

a. general power of appointment

b. special power of appointment

c. power of attorney

6.       a. Describe the requirements for a valid will.

b. What objectives can be accomplished by a properly drafted will?

7. Describe the advantages of a durable power of attorney as an estate planning tool.

 8. Describe the process of probating an estate.

 9. Describe the typical distribution system provided by state intestacy laws.

 10.    a Describe the essential elements of a taxable gift for federal gift tax purposes.

b. Describe the circumstances under which gifts may escape federal gift taxation.

11.    a. Identify the types of property that are includible in the gross estate of a deceased for federal estate tax purposes.

b. What deductions may be taken against the gross estate for federal estate tax purposes?

c. What other deductions may be taken in arriving at the amount of the federal estate tax payable?

12. Describe the purpose and principal provisions of the federal generation-skipping transfer tax (GSTT) system.

13. Summarize the differences between

a. state inheritance taxes

b. state estate taxes

c. state credit estate taxes

14. Describe the principal advantages of lifetime gifts by a client that are primarily

a. nontax advantages

b. tax advantages

15. Describe each of the following techniques for making gifts to minors that will not be subject to federal gift taxes:

a. UGMA or UTMA gifts

b. Sec. 2503(b) trusts

c. Sec. 2503(c) trusts

d. irrevocable trusts

16. Describe the circumstances under which property left by a decedent to his or her spouse (a) will and (b) will not qualify for the marital deduction.

17. Explain how each of the following devices may be used to qualify property left by a deceased to his or her spouse for the federal estate tax marital deduction:

a. an estate trust

b. a power-of-appointment trust

c. a QTIP marital-deduction trust

18. Explain how an AB trust arrangement can be used to maximize each spouse’s unified credit and optimize use of the marital deduction.

19. Explain how each of the following may be used advantageously in planning a client’s estate:

a. gift of a remainder interest to charity

b. gift of an income interest to charity

20. Describe the types of clients for whom life insurance may be particularly appropriate for purposes of

a. estate enhancement

b. estate liquidity