HS: 330 Fundamentals of Estate Planning test LATEST EDITION 2024/25 GUARANTEED
6 views 0 purchase
Course
Fundamentals of Estate Planning tst
Institution
Fundamentals Of Estate Planning Tst
Family Limited
Partnership (FLP)
Family business enterprise used to transfer wealth in a tax advantaged manner.
- Have general and limited partner interest
- Only general partners have management control
- Limited partners are often younger
- Assets are owned by the partnership
- Convenien...
HS: 330 Fundamentals of Estate Planning
test LATEST EDITION 2024/25 GUARANTEED
GRADE A+
Family Limited
Partnership (FLP)
Family business enterprise used to transfer wealth in a tax
advantaged manner.
- Have general and limited partner interest
- Only general partners have management control
- Limited partners are often younger
- Assets are owned by the partnership
- Convenient way to gift assets that are generally difficult to break
up
- Means of giving away property and still maintain control
- Keeping appreciation taxable to younger generation
Discounts:
- Lack of Marketability
- Minority Interest
Entities with pass through taxation
FLP, LLC, S Corp
Intentionally Defective Grantor Trust (IDGT)
Irrevocable trust that is a hybrid between grantor trust (for income
tax purposes) and irrevocable trust (for estate tax purposes). Free
of estate tax since it's irrevocable. The grantor is liable for the
income.
Benefits:
- Grantor can transfer appreciated property into IDGT without
incurring capital gains.
- Grantor cannot reclaim assets once they are transferred.
Self-Cancelling Installment Note (SCIN)
an installment sale that terminates at the earlier of the (1) death
of the seller or (2) the term set forth in the installment note
- If structured in an installment sale, all capital gains on
installments made will be liable to grantor
If structured as a private annuity, the grantor cannot secure the
sale without business collateral and they will owe capital gains on
the sale immediately
, - SCIN must reflect a risk premium to compensate the seller for the
risk of possible cancellation
- Seller of an SCIN might accept security without jeopardizing the
installment sale treatment
- At sellers death, the PV of the remaining amount is excluded from
seller's estate
- SCIN is a debt that is extinguished at the sellers death
- no payments after the date of death are included in the seller's
gross estate
Grantor Retained Annuity Trust (GRAT)
An irrevocable trust that pays a fixed annuity to the grantor
(settlor) for some defined term, and pays the remainder interest of
the trust to a non-charitable beneficiary.
- Interested and dividends earned are taxable to the grantor
- If grantor survives the trust term, none of the assets will be held
included in their estate. If he dies, they will
- When the trust is established a taxable gift occurs based on the PV
of the remaining interest in the trust
- Bene's of the GRAT will not receive a step up in basis on trust if
the grantor survives the term
Qualified Personal Residence Trust (QPRT)
A special form of a GRIT in which the grantor transfers his home to
the QPRT and receives "use" of the personal residence as the annuity.
The remainder interest of the trust passes to a non-charitable
beneficiary.
- Grantor must survive the term to receive estate tax savings
- Grantor will have a taxable gift upon creation
- At the end of term, the grantor must begin paying rent to the
remainder beneficiaries if he continues to live in the residence.
Tangible Personal Property Trust (TPPT)
Similar to QPRT, an irrevocable trust (type of GRAT) funded by
personal property (artwork, antiques etc.) that the grantor enjoys
use of until it passes to children or other non-charitable benes at
the death of the grantor
Irrevocable Life Insurance Trust (ILIT)
An irrevocable trust that owns and holds life insurance on its
grantor's life. An ILIT is also known as a wealth replacement trust
(WRT)
If transferred within three years from date of death, the amount in
included in gross estate
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Allan100. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $4.99. You're not tied to anything after your purchase.
