Estate Planning and Administration Flashcards

What is the federal estate tax exemption amount for 2024 per individual?

Answer: $13.61 million

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

Which estate planning strategy allows a married couple to effectively double the federal estate tax exemption?

Answer: Portability election

Portability allows a surviving spouse to elect to use the deceased spouse's unused estate tax exemption, effectively doubling the exemption for married couples.

A credit shelter trust (bypass trust) is primarily designed to do which of the following?

Answer: Shelter the decedent's estate tax exemption from the surviving spouse's taxable estate

A credit shelter trust holds assets up to the decedent's estate tax exemption so those assets do not count in the surviving spouse's taxable estate.

What is the estate planning benefit of the unlimited marital deduction?

Answer: Assets passing to a surviving U.S. citizen spouse are fully exempt from estate tax

The unlimited marital deduction allows an unlimited amount of assets to pass to a surviving U.S. citizen spouse free of federal estate tax.

Which valuation date may an executor elect for federal estate tax purposes if it reduces the estate's value?

Answer: Alternate valuation date (six months after date of death)

An executor may elect to value estate assets six months after the date of death if both the total estate value and estate tax liability are lower on that date.

Which document is required for a non-U.S. citizen surviving spouse to qualify for the marital deduction?

Answer: Qualified domestic trust (QDOT)

A qualified domestic trust (QDOT) is required when the surviving spouse is not a U.S. citizen, as it ensures estate taxes are collected if principal is distributed.