QUESTION: 73

Which of the following statements concerning a general power of appointment is (are) correct?
1. A general power of appointment is a power over property so broad that it approaches actual ownership or control over the property subject to the power.
2. The property subject to a general power of appointment will be includible in the gross estate of the holder of the power if held until death.

Both 1 and 2
Neither 1 nor 2
2 only
1 only

Answer(s): A

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QUESTION: 74

Which of the following statements concerning both estates and complex trusts is correct?

Both are required to file income tax returns.
Both are monitored by the courts.
Both must have more than one beneficiary.
Both come into being by operation of law.

Answer(s): A

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QUESTION: 75

Which of the following terms applies to the blending together of separate and community properties of spouses in community-property states?

Proration
Inception
Commingling
Transmutation

Answer(s): C

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QUESTION: 76

In addition to substantial probate assets, a married man with two minor children has a $1,000,000 ordinary life insurance policy payable to his estate. He wants to make certain that if he predeceases his wife the death proceeds will be available to provide income for his wife during her lifetime and to provide for their two children after her death. He would like the policy and/or its death proceeds to be as free of federal gift and estate taxes as possible with respect to both him and his wife. Which of the following courses of action would best accomplish these objectives?

Assign the policy to an irrevocable intervivos trust with five and five powers and designate the trustee to receive the death proceeds
Assign the policy to his wife who will establish a revocable intervivos trust to receive the death proceeds
Establish a revocable intervivos trust and designate the trustee to receive death proceeds
Designate his wife as beneficiary and she will establish a testamentary trust in her will to receive the proceeds at her subsequent death

Answer(s): A

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QUESTION: 73

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QUESTION: 76

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