In: Accounting
Multiple Choice
1)During the year, if a trust distributes corpus (principal), it is classified as a
Option a) Grantor Trust
Grantor trust is a trust where the grantor have special powers over the trust. One of these special power is the beneficial enjoyment of corpus or income from the trust without the approval or consent of any adverse party.
2) Which of the following rights, if retained by the grantor, will cause the trust to be included in their estate?
Option d) All of the above will cause inclusion.
The trust can be outside the grantor's estate for the estate tax and gift tax purposes of the if the grantor not retained any powers that would cause separate estate tax inclusion. All of the other 3 options are included in the grantor s powers.
3) Which of the following trust is typically created through a decedent’s Will
Option E) none of the above
A trust created by the will of a person after his death is called testamentary trust