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.