ESTATE PLANNING FINAL EXAM TEST
BANK | ACCURATE 560 REAL EXAM
QUESTIONS CURRENTLY TESTING AND
FREQUENTLY TESTED WITH RATIONALES
ALREADY GRADED A+ 2026-2027.
Ben is interested in using a Qualified Personal Residence Trust (QPRT) as part
of his estate plan. Which of the following is false regarding QPRTs? - ANSWER-
At the end of the trust term, the house will revert back to the grantor.
At the end of the trust term, ownership of the house is transferred to the
beneficiaries of the QPRT. All of the other statements are true
Kristi transferred $10,000,000 to the Kristi Family Trust. The trust is designed
as an irrevocable grantor trust. Kristi retained a 5% annuity payout from the
trust for the lesser of five years after the establishment of the trust or until her
,date of death, and she has named her only nephew, Alex, as the remainder
beneficiary of the trust. Of the following statements regarding Kristi's transfer
to this trust, which is true? - ANSWER-Because Kristi retained the annuity
interest from the trust, if she dies during the five years after the establishment
of the trust, the full fair market value of the trust assets will be included in her
gross estate.
The fact pattern describes a Grantor Retained Annuity Trust (GRAT)
established by Kristi. If Kristi dies during the term of her annuity interest, the
full fair market value of the trust assets will be included in her gross estate.
The irrevocable transfer of the remainder interest in the trust is a completed
transfer and therefore a gift. The income of a grantor trust is taxable to the
grantor. The trust is an inter vivos trust (created during the grantor's life), not
a testamentary trust (created in a decedent's will).
,Gene contributed $500,000 to an irrevocable trust and did not retain any right
to the trust's assets. The income beneficiary of the irrevocable trust was
Gene's sister, and the remainder beneficiary of the irrevocable trust was
Gene's niece. At the time of the transfer, Gene paid gift tax of $35,000. Gene
died four years later, when the value of the irrevocable trust was $1,200,000.
With regard to the irrevocable trust, how much is included in Gene's gross
estate? - ANSWER-$0
The transfer was irrevocable and more than three years have passed.
Robert transferred $100,000 to an irrevocable trust for the benefit of his
minor child, Dominic. The transfer was eligible for the annual exclusion. The
trust permits the trustee to accumulate trust income within the trust, and only
make distributions to Dominic based upon an ascertainable standard until
Dominic is 21 years old. When Dominic attains the age of 21, the trust must
, terminate and the trust assets must be distributed to Dominic. Which type of
trust has Robert created? - ANSWER-2503(c) trust
Robert has created a 2503(c) trust. A 2503(c) trust allows income to be
accumulated within the trust until the minor beneficiary attains the age of
majority and the transfer of property to the trust qualifies for the annual
exclusion. A 2503(b) trust requires the trustee to make annual income
distributions to the minor beneficiary. A Totten Trust is a bank account which
includes a payable on death clause. An IDGT is a grantor trust which requires
the grantor to pay the income tax on the income of the trust.
Which of the following is true regarding a Grantor Retained Annuity Trust
(GRAT)? - ANSWER-Interest and dividends earned by assets in a GRAT are
taxed to the grantor.
BANK | ACCURATE 560 REAL EXAM
QUESTIONS CURRENTLY TESTING AND
FREQUENTLY TESTED WITH RATIONALES
ALREADY GRADED A+ 2026-2027.
Ben is interested in using a Qualified Personal Residence Trust (QPRT) as part
of his estate plan. Which of the following is false regarding QPRTs? - ANSWER-
At the end of the trust term, the house will revert back to the grantor.
At the end of the trust term, ownership of the house is transferred to the
beneficiaries of the QPRT. All of the other statements are true
Kristi transferred $10,000,000 to the Kristi Family Trust. The trust is designed
as an irrevocable grantor trust. Kristi retained a 5% annuity payout from the
trust for the lesser of five years after the establishment of the trust or until her
,date of death, and she has named her only nephew, Alex, as the remainder
beneficiary of the trust. Of the following statements regarding Kristi's transfer
to this trust, which is true? - ANSWER-Because Kristi retained the annuity
interest from the trust, if she dies during the five years after the establishment
of the trust, the full fair market value of the trust assets will be included in her
gross estate.
The fact pattern describes a Grantor Retained Annuity Trust (GRAT)
established by Kristi. If Kristi dies during the term of her annuity interest, the
full fair market value of the trust assets will be included in her gross estate.
The irrevocable transfer of the remainder interest in the trust is a completed
transfer and therefore a gift. The income of a grantor trust is taxable to the
grantor. The trust is an inter vivos trust (created during the grantor's life), not
a testamentary trust (created in a decedent's will).
,Gene contributed $500,000 to an irrevocable trust and did not retain any right
to the trust's assets. The income beneficiary of the irrevocable trust was
Gene's sister, and the remainder beneficiary of the irrevocable trust was
Gene's niece. At the time of the transfer, Gene paid gift tax of $35,000. Gene
died four years later, when the value of the irrevocable trust was $1,200,000.
With regard to the irrevocable trust, how much is included in Gene's gross
estate? - ANSWER-$0
The transfer was irrevocable and more than three years have passed.
Robert transferred $100,000 to an irrevocable trust for the benefit of his
minor child, Dominic. The transfer was eligible for the annual exclusion. The
trust permits the trustee to accumulate trust income within the trust, and only
make distributions to Dominic based upon an ascertainable standard until
Dominic is 21 years old. When Dominic attains the age of 21, the trust must
, terminate and the trust assets must be distributed to Dominic. Which type of
trust has Robert created? - ANSWER-2503(c) trust
Robert has created a 2503(c) trust. A 2503(c) trust allows income to be
accumulated within the trust until the minor beneficiary attains the age of
majority and the transfer of property to the trust qualifies for the annual
exclusion. A 2503(b) trust requires the trustee to make annual income
distributions to the minor beneficiary. A Totten Trust is a bank account which
includes a payable on death clause. An IDGT is a grantor trust which requires
the grantor to pay the income tax on the income of the trust.
Which of the following is true regarding a Grantor Retained Annuity Trust
(GRAT)? - ANSWER-Interest and dividends earned by assets in a GRAT are
taxed to the grantor.
