Postmortem Estate Planning Techniques - Sample Questions 1 - 3

1. All of the following are requirements of a "qualified disclaimer" EXCEPT:

A) Refusal must be made within six months of death.
B)
Original beneficiary cannot influence the selection of the secondary beneficiary.
C)
Refusal must be in writing.
D)
Primary beneficiary cannot have accepted any interest or benefit from the property being disclaimed.

2. Clarence passed away on Jun. 1, 2011 with a taxable estate of $3 million. His executor and CPA helping with the estate estimate that the estate taxes due will still be around $700,000 after all the credits are taken from the estate. The housing and stock markets lose significant value during the summer months of June to September which caused the value of the estate to decrease significantly. Which of the following are TRUE statements?

I. The executor and CPA may want to use the alternate valuation date on Jan. 1, 2012 since the value of the estate has decreased significantly.
II. If the estate tax liability and gross estate is less on the alternate valuation date, they should file the estate tax return based on values at that date.
III. If the alternate valuation date is selected, the FMV of all applicable property on that date must be used.
IV. Diminishing value property is valued at the date of death value no matter which filing date is selected.

A) I, II and III only
B)
II, III and IV only
C)
I and IV only
D) I, II, III and IV

3. Mr. and Mrs. Success were married for 50 years with two children, and four grandchildren. When Mrs. Success died she left everything in her name to her husband Mr. Success. Mr. Success is looking for options to reduce the size of the estate. All of the following are valid options for Mr. Success EXCEPT:

A) Purchase a deferred annuity on his life to remove assets from the estate.
B)
Utilize the alternate valuation date if the value of the estate has gone down six months since the date of death.
C)
Initiate a qualified disclaimer for assets he is set to inherit.
D) Make a large charitable donation to the Humane Society.


Answer Key


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