The failure of an individual to have a will can result in which of the following?

l. The state will determine the disposition of the individual’s probate estate.

ll. The decedent’s preference for a personal representative, guardian, and other fiduciary’ roles may be ignored.

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Losses resulting from which of the following occurrences constitutes a permissible deduction from a decedent’s gross estate to determine the adjusted gross estate?

l. Unreimbursed losses of estate assets due to theft.

Il. Unreimbursed losses of estate assets due to a storm.

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Transactions involving a taxable gift include which of the following?

I. A father bought real estate, paid the entire $180,000 purchase price, and titled it jointly with his son with right of survivorship.

ll. A father deposited $50,000 in a bank account titled jointly with his daughter with right of survivorship and died before any funds were withdrawn from the account.

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A man established and funded an irrevocable trust and named a bank as trustee. All income from the trust is to be paid to his four grandchildren.

Which of the following powers retained by the grantor of the trust will cause all or a portion of the trust assets to be includible in his gross estate for federal estate tax purposes?

l. The power to add principal to the trust

II. The power to vary the amounts of trust income paid to each grandchild

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Which of the following statements concerning federal gift, estate, and income taxes is (are) correct

I. A taxable gift of income-producing property automatically transfers income tax liability to the donee.

II. The value of gifts made within 3 years of death cannot be brought back into the donor’s gross estate.

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Which of the following provisions is (are) generally common to all buy-sell agreements?

l. Provisions specifying how the purchase price is to be funded.

II. Statement indicating the purpose of the agreement.

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A wife owns a $100,000 life insurance policy on her husband’s life. She has named her son the revocable beneficiary.

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

l. At the husband’s death, the interpolated terminal reserve of the policy is a gift to the son.

II. The annual increase in the cash value is a gift to the son.

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A father plans to create a trust for the benefit of his 22-year-old son and wishes to take advantage of the gift tax annual exclusion. He has named a bank as trustee.

Which of the following trust provisions would cause the gifts to be ineligible to qualify for the gift tax annual exclusion?

l. The trust income is to be paid to the son or accumulated at the discretion of the trustee.

II. The income is to be accumulated until the son reaches age 32 when all accumulated income and principal are to be distributed to him.

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Which of the following statements concerning the federal income taxation of estates is (are) correct?

I. An estate is entitled to a personal exemption of $300 and a standard deduction.

ll. An estate is entitled to a tax deduction for amounts of income distributed.

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All the following factors are important in assessing liquidity needs in estate planning EXCEPT the

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