3. D T A B or Estate Income for Life Remainder Problem 21 (1)(a) & (b) Present interest? Yes as to income; No as to remainder. Spendthrift clause irrelevant. Key is mandatory income distributions. Property Transfer - Independent

4. D T A B or Estate Income for Life Remainder Problem 21 (1)(c) Present interest? No. A not assured right of present enjoyment. B’s remainder clearly future interest. Property Transfer - Independent T can accumulate income

5. D T A or C B or Estate Income for Life Remainder Problem 21 (1)(d) Present interest? No. Neither A, B or C assured right of present enjoyment. Property Transfer - Independent T must sprinkle income between A & C.

6. D T A or C B or Estate Income for Life Remainder Problem 21 (1)(e)&(f) Present interest? Yes, as to A income interest. A has control of present enjoyment. Corpus invasion right not impact present income right. Property Transfer - Independent T can accumulate income with A consent or invade Corpus for A

7. D T A A or Estate Income for 4 yrs - 5k value Remainder -15k Problem 21 (2) What annual exclusion impact if gift outright? Make any sense? If any gift not covered by annual exclusion, gift tax return due by 4/15 per 6075(b)(1). 20k securities - Independent Annual exclusion? 5k “Total amount of gifts? 15k If income term lengthened? Higher annual exclusion.

8. D C Problem 21 (3)(a) & (b) Life policy Worth 75k (a)Policy gift. 12k annual exclusion. 63K gift amount. (b)5k premium gifts. Sheltered by annual exclusion. No gift tax return required. 5k premiums

9. D ILIT Problem 21 (3)(c) & (d) Life policy Worth 75k c) Policy transfer. All future interest. 75k gift. (d)5k premium gifts. No annual exclusion. No present interest. 5k gift. 5k premiums CsGCs Support post death

10. D ILIT Problem 21 (3)(e) & (f) Life policy Worth 75k (e)Crummey converts 5k premium to present interest. Gift sheltered by annual exclusion. (f) Premium 10k. Crummey works for D’s annual exclusion. Lapse of Crummey triggers “5&5” for C. C has taxable gift of 5k excess per 2702, plus 2036 pull back into C’s estate. 5k premiums CsGCs Support post death Crummey Right

11. D ILIT Problem 21 (3)(g) & (h) Life policy Worth 75k (g) Crummey converts 10k premium to present interest. No 5 & 5 problems because neither C or GC exceeds. (h) Premium 24k. Crummeys protect D annual exclusion. Have C and GC each made 7k taxable gift, subject to 2036 pullback? Probably. If document reciprocal agreement to allow lapse, could you argue consideration and no gift? Long shot - don’t bet on it. 10k premiums CGC Support post death Crummey Right Crummey Right

12. Dena & Mark Estate Plan Daughter Trust Son Trust GC Trust - 1 GC Trust -2 GC Trust - 3 GC Trust - 4 GC Trust - 5 GC Trust - 6 Family L.L.C. Dena & Mark Living Trust Per. Res. Trust Char. Rem. Trust Alma Maters Dynasty Trust LLC Units Invest. Assets Income Home Remainder Term Use Stock Income Charitable Deduct Remainder Cash Income, Support

13. D T 2503 Problem 21 (4) (a)Income accumulated to age 21. No annual exclusion because not expended for minor before age 21. (b)Trustee has discretion to spend for minor before age 21. Qualify for exclusion under 2503. (c)Funds only for college before 21. No annual exclusion under 2503 because “substantial restriction.” (d)Trusts “Age Boosts” to age 25 with minor having 30 day withdrawal right at age 21. Still qualify under 2503 even if affirmative act required of minor. Property Minor C

14. D T 2503 Problem 21 (4) (e)Age of distribution set at 18. Qualifies under 2503 - age 21 is max, not required. (f)Accumulated income must be distributed at age 21; corpus at age 25. Per Herr case, income may be separated from corpus under 2503. Hence, income interest qualifies for exclusion, but not corpus. (g)In (f), if income interest under age 21 less than 12k, could income interest from 21 to 25 be tacked on to max annual exclusion? No per Levine case. Property Minor C

15. D T 2503 Problem 21 (4) (h) Income must be distributed annually to child to age 21, then corpus. Outside of 2503(c), but income interest still qualifies for annual exclusion because is present interest. If trustee had power to accumulate, no hope for annual exclusion. Property Minor C