Which of the following statements concerning the estate tax treatment of assets

Question

Which of the following statements concerning the estate tax treatment of assets held in a custodial account under either an UGMA or an UTMA is (are) correct?

                    I       If the parent-custodian dies before the minor reaches age 18, the custodial assets

                           are caught in the gross estate of the donor-parent.

                    II      If the minor dies before age 18, the custodial assets are caught in the gross estate

                           of the minor.

                    III     The parent can remove the custodial property from the parent’s gross estate by

                           naming the parent’s brother as custodian.

A.      I only

B.      I and II only

C.     II and III

D. I, II and III

Can you provide a detailed explanation for your answer? Please only answer if you have a strong background in estate planning.

Explanation / Answer

Answer B.

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