Question

Question 6 (1 point)

All of the following are trusts that will qualify for the marital deduction except:

Question 6 options:

	QTIP Trust
	Estate Trust
	Portability Trust
	Power of Appointment Trust

Question 7 (1 point)

All of the following statements regarding disclaimers are true except:

Question 7 options:

	The testator may rely on disclaimers to satisfy his estate planning objectives
	A disclaimer is a refusal by a beneficiary to accept benefits from a lifetime or testamentary transfer
	Qualified disclaimers may be utilized as a flexible post-mortem estate planning strategy
	A disclaiming party has absolutely no tax consequences associated with a qualified disclaimer

Question 8 (1 point)

Michelle Fenner is the qualified plan trustee for the defined benefit plan held by Flatt Tire Company. Flatt Tire uses life insurance as part of their qualified defined contribution plan. Currently, the cash value of the life insurance policies in the plan amounts to $50,000. Ms. Fenner can borrow against the cash value of the life insurance policies held in the plan.

Question 8 options:

	True
	False

Question 9 (1 point)

Mandy Thomas, age 47, is the owner of The Golf Pro Shop. Mandy wants to retire at age 55. The company adopted a defined benefit plan 2 years ago, 3 years after the business opened. Mandy wants to increase the amount that she contributes to her own retirement. Mandy can

Question 9 options:

	increase the amount, but must also contribute to all other company employee accounts by the same proportion
	she cannot increase her contribution
	increase the amount, but maximum benefit will be cut in half because the plan is less than 10 years old
	increase the amount without limit
	increase the amount within limits set by the Internal Revenue Code

Question 10 (1 point)

Anchor Hardware Store has a SEP and a qualified profit sharing plan. When Anchor Hardware makes a contribution to the SEP, contributions to the qualified profit share plan are not affected.

Question 10 options:

	True
	False

Answer 1

6). Portability trust does not qualify for marital deduction.

7). A testator cannot solely rely on disclaimers to satisfy his estate planning objectives because quite a few times it happens that the testator does not have a clear idea about how the estate should be distributed in 10 or 15 years.

8). True - Being the plan trustee, Michelle Fenner can borrow against the cash value of the life insurance policies held in the plan. The qualified trustee can borrow against the life insurance policies instead of withdrawing funds from the company's cash flows.

9). As per the IRS, Mandy can increase the amount within the limits which have been set by the Internal Revenue Code.

10). False - Contribution to the SEP will affect contribution to the qualified profit sharing plan as total contribution cannot be more than the lesser of 25% of employee compensation or $56,000 for 2019 ($55,000 for 2018).