Vested versus Contingent Beneficiary

Course: Estate PlanningLesson 3: Understanding Trusts and Trust Documents Student Question: In the example, I would think Northwestern would have a future, contingent interest, as their interest is dependent upon the death of the wife. But the feedback tells me it’s a vested interest.  Do we assume death is inevitable, and therefore not a contingent-worthy…

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Risk Premium versus Intrinsic Value

Course: Investment PlanningLesson 5: Fundamental Equity Analysis Student Question: The first review exercise page in Lesson 5, is Intrinsic Value the same as Risk Premium? Is that why we’re solving for P0 and not V (which is given)? The formula provided in the explanation confuses me. (question and answer from review exercise below) Review Exercise Question: Current price…

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Crummey Powers

Course: Insurance PlanningLesson 16: The Irrevocable Life Insurance Trust Student Question: Must Crummey powers always be in effect to apply the annual gift tax exclusion in order to transfer to an irrevocable trust? Or is it the case that as long as it was done once, will all transfers be eligible for the annual gift tax exclusion? Instructor…

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Donating Short-term Appreciated Securities

Course: Income Tax PlanningLesson 15: Property Transactions Student Question: In the lesson, deducting donations of ‘cash’ versus ‘long term appreciated securities’ are differentiated.  I’m curious about “short term appreciated securities”.  In other words, if I own a stock – bought at $10,000 and it’s worth $50,000 when I donate, but I’ve only owned it 6…

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Custodial Accounts and Gifting

Course: Estate PlanningLesson 13: Case Study Online Student Question: If a check given by Mary to Peter was deposited into a custodial acct where Mary was the custodian, doesn’t that mean that Mary didn’t give up ALL control, so it’s not a complete gift? Instructor Response: That’s a great way to approach completed gift questions!…

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Maximum Family Benefit

Course: Insurance PlanningLesson 10: Social Security Student Question: Does the maximum family benefit apply to a husband and wife that are both fully insured if the combined total between the two exceeds the maximum family limit?   If I understand correctly, the maximum family limit only applies if there are beneficiaries within the family receiving benefits…

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Unused Premiums in Term Insurance

Course: Insurance PlanningLesson 12: Types of Life Insurance Student Question: Could you help clarify the term “unused premiums” as it relates to term life insurance?  I guess I don’t see how you could have a premium not used in term life. Instructor Response: Assume you pay $6,000 in annual prepaid premiums on Jan 1 2020…

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Crummey Powers

Course: Insurance PlanningLesson 16: The Irrevocable Life Insurance Trust Student Question: Must Crummey powers always be in effect to apply the annual gift tax exclusion in order to transfer to an irrevocable trust? Or is it the case that as long as it was done once, will all transfers be eligible for the annual gift tax exclusion? Instructor…

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Net Unrealized Appreciation

Course: Retirement PlanningLesson 7: Income Distribution Planning for Qualified Plans Student Question: Regarding net unrealized appreciation, the value of company shares at the time of distribution would be considered the client’s cost basis in that any earnings in excess of that amount could be subject to short-term cap gains if sold within a year of…

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Social Security Retirement Benefits

Course: Estate PlanningLesson 3: Understanding Trusts and Trust Documents Student Question: This question (below) doesn’t quite make sense to me.  Could you clarify why the correct answer is D? Robin Elizabeth qualifies for a retirement benefit of $250 and a spouse’s benefit of $400. At her full retirement age, she will receive which of the following?…

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