A married couple have written a will that leaves part of their money to a trust fund. The income from this trust will benefit the surviving spouse until death, with the principal then going to their children. Why was the trust fund created? To reduce the estate of the surviving spouse and, thus, decrease the total amount of estate taxes to be paid by the couple. To ensure that the surviving spouse is protected from lawsuits filed by the couple’s children. To give the surviving spouse discretion over the ultimate use of these funds. To maximize the earning potential of the money because trust funds generate more income than other investments.
A married couple have written a will that leaves part of their money to a trust fund. The income from this trust will benefit the surviving spouse until death, with the principal then going to their children. Why was the trust fund created? To reduce the estate of the surviving spouse and, thus, decrease the total amount of estate taxes to be paid by the couple. To ensure that the surviving spouse is protected from lawsuits filed by the couple’s children. To give the surviving spouse discretion over the ultimate use of these funds. To maximize the earning potential of the money because trust funds generate more income than other investments.
Chapter20: Income Taxation Of Trusts And Estates
Section: Chapter Questions
Problem 11DQ
Related questions
Question
A married couple have written a will that leaves part of their money to a trust fund. The income from this trust will benefit the surviving spouse until death, with the principal then going to their children. Why was the trust fund created?
- To reduce the estate of the surviving spouse and, thus, decrease the total amount of estate taxes to be paid by the couple.
- To ensure that the surviving spouse is protected from lawsuits filed by the couple’s children.
- To give the surviving spouse discretion over the ultimate use of these funds.
- To maximize the earning potential of the money because trust funds generate more income than other investments.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT