3.11.6 Basic Quiz -- Tandem Trusts

It is possible for families to transfer $1 million to $100 million through to other family members without any payment of gift or estate taxes.

True False

A successful inheritance plan is one that makes the child a "better person."

True False

An effective inheritance plan will distribute the estate to the children in two lump sums.

True False

The "tandem trust" plan incorporates the use of a Testamentary Charitable Remainder Unitrust and a Testamentary Charitable Lead Trust.

True False

Testamentary Charitable Remainder Unitrusts, and Testamentary Charitable Lead Trusts are excellent vehicles to accomplish layer three and four transfers.

True False

An excellent way to get a "double discount" for estate tax purposes is to combine a FLP or LLC with a Charitable Lead Trust.

True False

Zero estate tax plans with IRAs are not possible since IRAs are frequently subjected to two layers of tax.

True False

Stock options, IRAs, commercial annuities, savings bonds, or pension plans that are transferred into a testamentary charitable unitrust require the trustee to report and pay income tax because the transferred assets are IRD assets (income with respect to the decedent assets).

True False

Through proper planning and investment, it is possible for a trustee to pay out tax-free income from the testamentary unitrust that was funded with an IRA.

True False

An IRA that passes to a charitable remainder unitrust to benefit children is not subject to estate taxes because a charity is the ultimate beneficiary of the IRA.