Husband and Wife have two children and decide to divorce. Husband later remarries. He is concerned about his new wife inheriting his estate without sufficient assets being distributed to his two children. Which of the following trusts would be most appropriate to ensure the children receive sufficient assets from Husband's estate? A)A power of appointment trust that names the new wife as the sole income beneficiary and qualifies for the marital deduction, and the children as the remainder beneficiaries B)A revocable living trust that names the new wife as the income beneficiary with a general power of appointment, and the children as the remainder beneficiaries C)A testamentary trust that names the new wife as the sole beneficiary and states that it is Husband's wish for the new wife to distribute 10% of the assets to each child upon their 25th birthdays D)A qualified terminable interest property trust (QTIP) that names the new wife as the income beneficiary and the children as the remainder beneficiaries, for which the QTIP election was made

Remainder beneficiaries refer to the persons who are eligible to receive the principal value of the…

Answered: sband and Wife have two children and…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Husband and Wife have two children and decide to divorce. Husband later remarries. He is concerned about his new wife inheriting his estate without sufficient assets being distributed to his two children. Which of the following trusts would be most appropriate to ensure the children receive sufficient assets from Husband's estate?

A power of appointment trust that names the new wife as the sole income beneficiary and qualifies for the marital deduction, and the children as the remainder beneficiaries

A revocable living trust that names the new wife as the income beneficiary with a general power of appointment, and the children as the remainder beneficiaries

A testamentary trust that names the new wife as the sole beneficiary and states that it is Husband's wish for the new wife to distribute 10% of the assets to each child upon their 25th birthdays

A qualified terminable interest property trust (QTIP) that names the new wife as the income beneficiary and the children as the remainder beneficiaries, for which the QTIP election was made

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