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18 Cards in this Set
- Front
- Back
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Under what two circumstances can a noncitizen spouse get an unlimited marital deduction
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spouse becomes a citizen b4 tax return is filed and has been a resident alien at all times since the decedent's death
2) property passes to the spouse through a qualified domestic truct (QDOT) |
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What are the three requirements for an unlimited marital deduction
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1)property left to the SS must be included decedents gross estate
2)property must pass to the decedents spouse 3) passing interest cannot be terminable |
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What are the exceptions to the terminable interest rule regarding the unlimited marital deduction?
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1)terminal interest is limited to requirement that spouse lives 6 months
2)surviving spouse receives a life estate coupled with a general power of appointment (like the A Trust) 3)Property is QTIP/C Trust 4) CRT and spouse is the only noncharitable beneficiary |
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What are the names of the 2 types of marital deduction planning strategies
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10 100% marital deduction planning
2) zero federal estate tax planning |
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What are some techniques used in planning for nontraditional relationships
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1)convert property to JTWROS; 2)establish a RLT naming the other cohabitant as the beneficiary at death; 3) naming the other cohabitant as beneficiary of qualified plans and IRAs4)purchasing a life insurance policy with the cohabitant as named beneficiary
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A SS beneficiary owned the insurance policy on the life of the decedent. Are the insurance benefits eligible for the unlimited marital deduction?
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No. The death benefit was not apart of the decedent's gross estate, therefore, the unlimited marital deduction for the death benefit is not available to the SS.
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What are the requirements of a C trust (QTIP)
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Income from trust must be payable to SS annually for life, 2) value of trust assets must be included in gross estate of SS at death; no general power of appt.
Requires election Usually used in second marriage to protect assets for children of first marriage |
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What is an A trust (appointment trust)
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No election required. Income must be payable to spouse for life. SS has general power of appointment
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What is the B trust (bypass trust)
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Used to take advantage of the applicable credit amount when first spouse dies Property in B trust DOES NOT qualify for marial deduction in the first to die spouse'a estate. It can also be used instead o an outright bequest to nonspouse heirs who can't handle property
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How should the marital deduction be used
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Maximum tax savings wanted, use marital deduction; spouse will remarry and give all money to new love, use less marital deduction
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What is the QDOT
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a qualified doestic trust that passes to a non US SS. Note the marital deduction is allowed if the spouse becomes a us citizen b4 due date of tax return
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What is overqualifying the estate
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Decedent uses too much of the marital deduction to the extent that the decedent's taxable estate is below the applicable exclusion amount--wasting the credit
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What is underqualifying the estate
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Using too little marital deduction, so that the decedent's estate exceeds the applicable exclusion amount
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Which marital trusts are eligible for the marital deduction
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A and QTIP/C
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Which marital trusts are require LAME income to SS
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A and QTIP/C require lifetie, annual, andatory and exclusive income to surviving spouse
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Which marital trusts are included in gross estate of SS
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A and QTIP/C
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Which marital trusts allow the SS to change the beneficiary
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Only the A trust
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Other than the A, B, and C trust, what trust also requires LAME income to SS
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QDOT requires lifetime, annal mandatory and exclusive income to spouse. However spouse cannot dip in corpus unless estate taxes set assiide
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