Table of Contents

Chapter 1 - Estate Tools & Trusts - Section 1. 1

Build, Preserve & Distribute. 2

Legal Documents. 3

Estate Planning Team... 4

Attorney. 6

Accountant 6

Insurance Agents. 6

Financial Planner 7

Estate Administration. 7

Probate Court 7

Executor 8

Internal Revenue Service (IRS) 10

Trustee. 10

Family Members. 10

Things to Be Done When Death Occurs. 10

Estate Planning Techniques & Devices. 11

Transfers within Probate. 11

Disposition of Property without a Will 11

Disposition of Property with a Will 12

Transfers outside Probate. 12

Joint Tenancy with Right of Survivorship. 13

Tenancy in Common. 13

Retirement Plan & Individual Retirement Accounts. 13

Life Insurance. 13

Gifts. 14

Payable on Death Accounts (POD) 14

Transfers Using a Trust 14

Special Planning Tools. 15

Spending. 15

Annual Gift Tax Exclusion. 15

Applicable Exclusion Amount 17

Spousal Portability of Unused Exemption Amount 17

2010 Special Election. 18

Unlimited Marital Deduction. 18

Family Business Deduction - Expired. 18

Installment Payment of Estate Taxes. 19

Private Annuities. 19

Installment Sale to Family Member 19

Self-Canceling Installment Notes. 19

Irrevocable Life Insurance Trust 20

Special Valuation of Farms and Businesses - '2032A.. 20

Crummey Trusts. 22

Charitable Remainder Trusts. 22

Minor Trusts. 22

Family Limited Partnerships. 23

Grantor Retained Income Trusts. 23

Qualified Personal Residence Trusts (QPRTs) 23

Grantor Retained Annuity Trusts (GRATs) 24

Grantor Retained Unitrusts (GRUTs) 24

Buy-Sell Agreements. 24

Chapter 1 - Section 1 Review questions. 25

Chapter 1 - Estate Tools & Trusts - Section 2. 26

Trusts. 26

What is a Trust?. 26

Why a Trust?. 26

Types of Trusts. 28

Common Elements. 28

Revocable Trust 28

Irrevocable Trusts. 28

Testamentary Trust 29

Foreign Trusts - '679. 29

Family Trusts. 30

Medicaid Trust 30

Living Trust 30

Reversion. 31

Advantages of a Living Trust 31

Disadvantages. 31

Priority. 31

Pour-Over Will 32

Trust Taxation. 32

Income Tax. 32

Grantor Trusts - '671 to '678. 32

Grantor Retained Income Trust 34

Revocable Trusts Included in Estate - '646 & '2652(b)(1) 35

Election for Income Tax Purposes. 35

Irrevocable Trust Taxation. 36

Capital Gains. 36

Deduction of Estate Planning Expenses. 37

Deductibility of Death Expenses. 37

Gift Tax. 37

Estate Tax. 38

Unlimited Marital Deduction. 38

Outright to Spouse. 38

Marital Deduction Trust 39

Qualified Terminable Interest Property (QTIP) Trust 39

A-B Format 41

A-B-C (QTIP) Format 44

Valuation & Tax Basis. 44

Alternate Valuation. 44

Fundamental Provisions - Revocable Living Trust 47

Identification Clause. 47

Recital Clause. 47

Property Transfer Clause. 47

Income & Principal Clause. 47

Revocation & Amendment Clause. 47

Trustee Clause. 48

Trustees Acceptance. 48

Choice of a Trustee. 48

Corporate Trustee Factors. 48

Individual Trustee Factors. 48

Trust Termination Clause. 49

Chapter 1 - Section 2 Review questions. 51

Answers & Explanations. 52

Glossary. 59

Keywords & Phrases. a

CPE Exam Answer Sheet c

Final Examination. d