Estate Planning and Probate Flashcards

Which generation-skipping transfer tax exemption feature allows unused exemption to be allocated to transfers made during life or at death?

Answer: Portability

Portability allows a surviving spouse to elect to use the deceased spouse's unused federal estate and gift tax exemption (DSUE).

Which document allows an individual to state preferences for end-of-life medical treatment in advance?

Answer: Living will / advance directive

A living will or advance directive records a person's specific instructions about life-sustaining treatment if they become unable to communicate.

What is the primary tax advantage of gifting appreciated property through a charitable remainder trust (CRT)?

Answer: The grantor avoids all capital gains tax immediately and receives a partial charitable deduction

Transferring appreciated property to a CRT allows the trustee to sell it without immediate capital gains tax, and the grantor receives an upfront charitable income tax deduction.

What term describes the process of distributing a deceased person's share equally among their descendants when a beneficiary predeceases the testator?

Answer: Per stirpes

Per stirpes distribution means a deceased beneficiary's share passes to their descendants in equal shares by representation.

Under the Uniform Trust Code, what duty requires a trustee to treat all beneficiaries—current and remainder—impartially?

Answer: Duty of impartiality

The duty of impartiality requires trustees to balance the competing interests of income beneficiaries and remainder beneficiaries when investing and distributing trust assets.

Which type of will is entirely handwritten and signed by the testator without witnesses?

Answer: Holographic will

A holographic will is handwritten and signed by the testator; many states recognize these without the usual witness requirements if the material portions are in the testator's handwriting.

What is 'ancillary probate' and when is it required?

Answer: A second probate proceeding in a state where the decedent owned real property outside their domicile state

Ancillary probate is a secondary probate proceeding required in each state where a decedent owned real property, in addition to the primary domicile probate.