Inter Vivos Trusts

question 72

Multiple Choice

Inter vivos trusts

• A)are formed to protect assets for a dependent child.
• B)may not be used for fixed assets such as a cottage.
• C)are continually and actively managed by the settlor.
• D)pay taxes on earnings at the highest marginal rate.

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Definitions:

Lease-Purchase Analysis

A financial evaluation technique used to determine the most cost-effective option between leasing an asset and purchasing it outright.

Sale and Leaseback

A financial transaction where one sells an asset and leases it back for the long-term; thus, one continues to be able to use the asset but does not own it.

Balance Sheet

A financial statement that provides a snapshot of a company's financial condition at a specific point in time, detailing assets, liabilities, and equity.

Incremental Cash Flows

The additional cash flow generated by a company as a result of undertaking a new project or investment.