Lloyd is restructuring his estate plan. He has the following objectives:To provide his wife with an annual income stream that will be hers automatically without making a request of the trusteeTo provide his wife with additional income based upon her needs and the trustee's discretionTo prevent his wife from invading the principalTo be assured that his children from his current marriage and his prior marriage share in his wealth equally after his wife's deathTo enable his executor to make full use of his estate tax applicable credit amountBased on Lloyd's objectives, which one of the following is the most appropriate trust or combination of trusts? A)Combination B trust and qualified terminable interest property (QTIP) trust B)Family bypass (B) trust C)Outright bequest to his wife D)Power of appointment (A) trust

Based on Lloyd's objectives, the most appropriate trust or combination of trusts would be a…

Answered: has the following objectives: To…

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Lloyd is restructuring his estate plan. He has the following objectives:

To provide his wife with an annual income stream that will be hers automatically without making a request of the trustee
To provide his wife with additional income based upon her needs and the trustee's discretion
To prevent his wife from invading the principal
To be assured that his children from his current marriage and his prior marriage share in his wealth equally after his wife's death
To enable his executor to make full use of his estate tax applicable credit amount

Based on Lloyd's objectives, which one of the following is the most appropriate trust or combination of trusts?

Combination B trust and qualified terminable interest property (QTIP) trust

Family bypass (B) trust

Outright bequest to his wife

Power of appointment (A) trust

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