200757 Lecture Notes - Lecture 6: Beneficiary (Trust), The Family Law, Individual Psychological Assessment

31 views2 pages

amberhippopotamus661

7 Apr 2019

School

UWS

Department

University of Western Sydney

Course

200757

Professor

anonymous

For unlimited access to Class Notes, a Class+ subscription is required.

Document Summary

There are two types of trusts, discretionary and non-discretionary. A discretionary trust is a trust in which the trustee has complete or partial discretion as to when and how the income or property is distributed to the beneficiary(ies). Discretionary and non-discretionary trusts are valued using different approaches. To value non-trust assets, we use the fair market value approach , which is the market value based on what an unpressured buyer in the market would pay. However, in their nature, trust interests cannot be sold on the market and so courts have relied on the. Value-to-owner approach as a fair evaluation of value. The value- to-owner approach is the price that the owner of an asset (in this case, the beneficiary) would hypothetically pay to not be deprived of it. Slightly different rules will apply if the trust is made up of capital interest or income interest.

Related Questions

John and Ed are cousins who turned 25 today. Their grandfather began putting $2,500 per year into a trust fund for John on his 20th birthday, and he just made a 6th payment into the fund. The grandfather (or his estate's trustee) will make 40 more $2,500 payments until a 46th and final payment is made on John's 65th birthday. The grandfather set things up this way because he wants John to work, not be a "trust fund baby," but he also wants to ensure that John is provided for in his old age. Until now, the grandfather has been disappointed with Ed, hence has not given him anything. However, they recently reconciled, and the grandfather decided to make an equivalent provision for Ed. He will make the first payment to a trust for Ed today, and he has instructed his trustee to make 40 additional equal annual payments until Ed turns 65, when the 41st and final payment will be made. If both trusts earn an annual return of 8%, how much must the grandfather put into Ed's trust today and each subsequent year to enable him to have the same retirement nest egg as John after the last payment is made on their 65th birthday?

peachmole180

Assume that you are a married individual and you have aliving-trust with all your assets (home, investments, cashaccounts). Your spouse is both a trustee and beneficiary of thattrust. You also live in joint tenancy with right of survivorshipState where your death means your spouse takes ownership of allassets that are shown as joint tenancy. For example, if a bankaccount has both your names, the bank account transfers over toyour spouse without tax consequences. If the bank account is not inboth your names, it goes into the Estate. The same applies for realestate and other investments. The general rule would be that yourmajor assets would be under the name of the Trust, and all otherassets would be listed as joint tenancy. However, there are fewareas to consider: What are the tax benefits of moving assets to aliving or irrevocable trust? Do both types of trusts file a taxreturn, or taxable income and expenses "passed through" to you?FINAL QUESTION FOR EVERYONE What is the solution to our tax revenueshortages?? We have a tax system that tries to modify taxpayerbehavior and is constantly changing, but is not collecting enoughrevenue to cover expenditures. Some think corporations are payingtoo much, but they get the benefits of the US economy andprotection of our laws - and if they don't pay, then the individualtaxpayer has to pay. However, as we now know, the individualtaxpayer already carries the majority of the tax burden, and if thewealthiest don't pay their fair share, the lowest earners have topay. The bottom line is someone has to pay - the question is how tomake that equitable. Thoughts?

Estate Planning

Please provide little explanation with the answers.

............................................................................

1- For purposes of the marital deduction, all the following are advantages of a power of appointment trust EXCEPT:

(A) Principal distributions can be varied according to the surviving spouseâs needs.

(B) Probate of trust corpus can be avoided at the surviving spouseâs death.

(D) Non-income producing property can be purchased and safely retained in the trust.

............................................................................

2- All of the following statements concerning a Section 6166 installment payment of estate taxes attributable to the inclusion of a closely held business in a decedentâs gross estate are correct EXCEPT:

(A) Under certain circumstances, the estate will forfeit its right to the installment payments and the remaining unpaid tax will be accelerated for payment.

(B) The business must constitute more than 35% of the decedentâs adjusted gross estate.

(C) If the estates qualifies, both the tax payments attributable to the business and the payments of interest on the unpaid balance must be paid in equal installments for 15 years.

(D) The estateâs personal representative has the sole discretion to elect a deferral of the estate tax payments.

............................................................................

3- All the following statements concerning the âkiddie-taxâ rules are correct EXCEPT:

(A) The rules are promulgated to curtail the shifting of income from high-tax-bracket parents to the lower-tax-bracket children.

(B) The rules are limited to trust income received by a child from trusts established by the childâs parents or grandparents.

(D) The rules provide for the taxation of a childâs net unearned income at the parentâs highest marginal tax rate.

whitemammoth870

200757 Lecture Notes - Lecture 6: Beneficiary (Trust), The Family Law, Individual Psychological Assessment

Document Summary

Get access

Related Documents

200757 Lecture Notes - Lecture 9: Settlor, Corporate Personhood, Beneficial Ownership

200757 Lecture Notes - Lecture 12: Settlor, Fiduciary, Natural Person

200757 Lecture Notes - Lecture 13: Fiduciary

Related Questions