Wednesday, May 1, 2024
Charitable Deduction Methods

6.4.4 Basic Quiz -- Testamentary Lead Trust
Charitable lead trusts (CLTs) are most effective for donors of substantial wealth.
     True      False
Using a series of lead trusts, the donor benefits from the powerful discounts from the lead trusts, but also is able to make distributions to heirs over a set number of years.
     True      False
Testamentary lead trusts are best employed when children already have good money management skills.
     True      False
A testamentary lead trust cannot be funded with a family limited partnership.
     True      False
For a lead trust, the lowest applicable federal rate (AFR) produces the greatest deduction.
     True      False
When a four-layer testamentary lead trust is created, the first, second and third layers are typically unitrusts, while the fourth layer is an annuity trust.
     True      False
The typical payout chosen for a lead trust is quarterly payments.
     True      False
The charitable deduction is equal to the remainder interest.
     True      False
The generation-skipping transfer tax (GSTT) always applies to testamentary lead trusts.
     True      False
If a testamentary lead trust is created to pay to grandchildren or a later generation, generation-skipping transfer tax (GSTT) will need to be paid.
     True      False



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