A single man with substantial assets and income is supporting his 80-year-old partially senile mother with monthly cash gifts. He is trying to find a practical way to support his mother while at the same time saving federal gift and income taxes without giving up ultimate control of any assets.

Which of the following courses of action will best accomplish these objectives?

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An individual who is a resident of State W is also the sole proprietor of a business located in State W. He owns real property located in State X that is used by the proprietorship. While on vacation in State Y, the individual meets an untimely death. Under the terms of his will, his entire estate is bequeathed to a resident of State Z.

Which state will tax the real property used by the proprietorship?

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

l. 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interest payable to the surviving spouse who has the unrestricted right to withdraw proceeds and with any proceeds not withdrawn payable equally to her children per stripes

ll. 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

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Which of the following statements concerning a power of appointment is (are) correct?

l. A power of appointment can be designed to restrict the donee’s right to appoint the property in favor of a specific class of recipients.

ll. A power of appointment can be designed to restrict the time period during which the donee may exercise the power.

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Which of the following statements concerning ante nuptial agreements is (are) correct?

l. They are frequently used to protect the interests of children of former marriages.

II. They can legally deprive a surviving spouse of his or her elective share of a deceased spouse’s estate.

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Which of the following statements concerning the joint tenancy with right of survivorship form of real property ownership is (are) correct?

l. The property is part of the probate estate of the first tenant to die.

ll. An owner can sell his interest in the property at any time without destroying the form of ownership.

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A number of states have passed statutes governing “living wills.”

Which of the following statements concerning a living will is (are) correct?

l. A living will is an alternative to an inter vivos trust under certain circumstances.

ll. A living will is an oral will made by the testator during a final illness when it is impossible to write one.

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Which of the following actions on the part of a trustee is (are) a breach of his duties?

I. Placing substantial amounts of cash from the sale of securities in a no interest bearing checking account for a period of years

II. Investing all trust assets in securities that favor income beneficiaries to the detriment of remainder persons

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Which of the following are ways of passing property from a deceased spouse to a surviving spouse so that the properly will qualify for the federal estate tax marital deduction?

I. When the surviving spouse receives the property by electing to take against the deceased spouse’s will

ll. When the surviving spouse receives the property as a consequence of the qualified disclaimer of another beneficiary

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Which of the following statements concerning wills is (are) correct?

l. A will should be reviewed periodically to assure that the property owner’s most recent intentions are honored at death.

ll. Once signed, a will’s provisions may not be changed without the consent of all the beneficiaries under the will.

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