Randy and Janet have an estate worth $20 million and all of the assets are title

Question

Randy and Janet have an estate worth $20 million and all of the assets are titled in Randy's name. After meeting with a financial planner, the couple established the following estate planning objectives: To give the surviving spouse lifetime and testamentary control over assets that will be professionally managed; to utilize their unified credits; and to minimize their total estate tax liability for their combined estates. Which techniques and trusts will accomplish their goals? The ALI defines a domestic partnership as two persons of the same or opposite sex;

Explanation / Answer

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Answer 20

Option A is correct

DEFINITION of 'Qualified Terminable Interest Property (QTIP) Trust'

A type of trust that enables the grantor to provide for a surviving spouse and also to maintain control of how the trust's assets are distributed once the surviving spouse has also died. Income, and sometimes principal, generated from the trust is given to the surviving spouse to ensure that he or she is taken care of for the rest of his or her life.

BREAKING DOWN 'Qualified Terminable Interest Property (QTIP) Trust'

This type of trust is commonly used by individuals who have children from another marriage. QTIPs enable the grantor to look after his or her current spouse and ensure that the assets from the trust are then passed on to beneficiaries of his or her choice, such as the children from the grantor's first marriage.

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Answer 21

Option A is correct

The ALI has recently suggested that qualifying, non-marital, cohabiting partners be treated as having taken on certain financial obligations with respect to each other. Basically, absent an explicit agreement to the contrary, the individuals will be treated as if they had married for purposes of determining their inter se rights and responsibilities, but will be treated as unmarried as far as the obligations of third parties are concerned. While this proposal has a variety of strengths, it is likely to be criticized as undermining the family, especially because same-sex partners may qualify as "domestic partners."

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