Martin Transfers Stock to an Irrevocable Trust and Names Himself

question 68

Multiple Choice

Martin transfers stock to an irrevocable trust and names himself to receive the trust income for life with the remainder interest gifted to his son. When Martin dies,

• A) none of the stock will be included in Martin's estate.
• B) the stock's value at the time of transfer to the trust will be included in Martin's estate.
• C) the value of the stock at death will be included in Martin's estate.
• D) the value of the stock less the present value of the income receivable by Martin will be included in Martin's estate.

---

Definitions:

Financial Crisis

A broad term for a situation when financial assets rapidly lose a significant part of their nominal value.

Contractionary Monetary Policy

A central banking strategy involving the increase of interest rates or reduction of the money supply to decrease inflation and slow down economic growth.

Short-Run Phillips Curve

A curve illustrating an inverse relationship between the rate of inflation and the rate of unemployment in the short term.

Disinflation

A decrease in the rate of inflation, indicating a slowdown in the rate at which prices for goods and services rise.