All of the Following Are Advantages of a Sprinkling Trust

question 47

Multiple Choice

All of the following are advantages of a sprinkling trust, except

• A)the trustee can choose the amount to distribute among multiple beneficiaries.
• B)the trustee can determine the amount to retain in the trust.
• C)the trustee can determine the amount to distribute to the sole trust beneficiary.
• D)the trustee can consider the tax rates of the beneficiaries and trust.

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Definitions:

Marginal Utility

The incremental pleasure or advantage obtained by consuming an extra unit of a good or service.

Price Ratio

The ratio or comparison between the prices of two different goods or services.

Diamond/Water Paradox

A paradox highlighting the contradiction between the high value of items with little utility (diamonds) and the low value of items with great utility (water), illustrating the difference between total and marginal utility.

Value in Exchange

The worth that a product or service has in the marketplace, determined by what others are willing to give up in exchange for it.