CAP CAP Estate Planning & Wealth Transfer

Question 1

Which estate planning tool allows a donor to transfer assets to a trust, receive an annuity payment for a fixed term, and pass remaining assets to heirs with reduced gift tax?

Accepted Answer

Grantor Retained Annuity Trust (GRAT)

Answer

A GRAT allows the grantor to receive fixed annuity payments for a term, with any remaining assets passing to heirs potentially free of gift tax if the IRS hurdle rate is exceeded.

Question 2

Under current U.S. law, what is the federal estate tax exemption amount per individual for 2024?

Accepted Answer

$13.61 million

Answer

For 2024, the federal estate and gift tax exemption is $13.61 million per individual, indexed for inflation annually.

Question 3

A philanthropic advisor recommends a testamentary charitable bequest. Which document is used to make this gift?

Accepted Answer

Last will and testament

Answer

A testamentary charitable bequest is made through a last will and testament and takes effect at the donor's death.

Question 4

Which strategy allows a high-net-worth donor to remove life insurance proceeds from their taxable estate while still funding a charity at death?

Accepted Answer

Irrevocable Life Insurance Trust (ILIT) with charity as beneficiary

Answer

An ILIT removes the policy from the insured's taxable estate, and naming the charity as beneficiary directs proceeds to philanthropy at death.

Question 5

What is the primary purpose of a 'pour-over will' in an estate plan that includes a revocable living trust?

Accepted Answer

To transfer probate assets into the revocable trust at death

Answer

A pour-over will directs any assets not already in the revocable trust at death to 'pour over' into that trust, ensuring a unified distribution plan.

(CAP) Certified Philanthropic Advisor Practice Test

(CAP) Certified Philanthropic Advisor Practice Test

CAP CAP Estate Planning & Wealth Transfer