American College HS-330 Fundamentals of Estate Planning Test HS-330 Exam Questions in PDF

Free American College HS-330 Dumps Questions (page: 16)

In addition to substantial probate assets, a married man with two minor children has a $1,000,000 ordinary life insurance policy payable to his estate. He wants to make certain that if he predeceases his wife the death proceeds will be available to provide income for his wife during her lifetime and to provide for their two children after her death. He would like the policy and/or its death proceeds to be as free of federal gift and estate taxes as possible with respect to both him and his wife. Which of the following courses of action would best accomplish these objectives?

  1. Assign the policy to an irrevocable intervivos trust with five and five powers and designate the trustee to receive the death proceeds
  2. Assign the policy to his wife who will establish a revocable intervivos trust to receive the death proceeds
  3. Establish a revocable intervivos trust and designate the trustee to receive death proceeds
  4. Designate his wife as beneficiary and she will establish a testamentary trust in her will to receive the proceeds at her subsequent death

Answer(s): A



Which of the following types of partial interests in property may be allowed a charitable deduction for estate tax purposes?
1. A remainder interest in the donor vacation home
2. A testamentary gift of a percentage of a decedent entire interest in property held in trust

  1. Neither 1 nor 2
  2. Both 1 and 2
  3. 1 only
  4. 2 only

Answer(s): C



To determine whether a taxable gift has been made, the IRS focuses on all the following factors EXCEPT:

  1. Was the value of the gift property in excess of the annual per-donee exclusion?
  2. Was the property transferred for less than an adequate and full consideration in money or money's worth?
  3. Was the transferred property real property or personal property?
  4. Did the donor absolutely, irrevocably, and currently divest himself of dominion and control over the property?

Answer(s): C



Which of the following statements concerning the so-called "kiddie-tax" on unearned income of children under age 14 is (are) correct?
1. The rules apply to earned income of the children.
2. The rules apply to trust income received by a child under age 14 only if the trust was established by the child's parents.

  1. Both 1 and 2
  2. Neither 1 nor 2
  3. 1 only
  4. 2 only

Answer(s): B



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

1. 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 stirpes
2. 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

  1. Both 1 and 2
  2. 1 only
  3. 2 only
  4. Neither 1 nor 2

Answer(s): A



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