Benefit of using retirement assets to fund bypass trust

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Reference no: EM131347614

1. Which statement regarding an ILIT is incorrect?

a. Insurance proceeds paid to the trust are protected from the claims of creditors, including the decedent’s creditors.

b. The trust cannot hold a survivorship policy when a husband and wife are co-insureds.

c. All incidents of ownership over a policy are held by the trustee.

d. An ILIT allows an insured to leverage annual exclusion gifts, his unified credit and his GST exemption by gifting a policy with a low current gift value in relation to the value at the insured’s death.

2. Which of the following is a benefit of using retirement assets to fund a bypass trust?

a. RMDs will be based on the oldest trust beneficiary’s life expectancy.

b. Income tax will not be realized when retirement assets are paid to a trust.

c. The client’s available estate tax exemption may be sheltered from future estate tax.

d. The trust may name a charity as the remainder beneficiary.

Reference no: EM131347614

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