You Would Like to Establish a Trust Fund That Will

question 42

Multiple Choice

You would like to establish a trust fund that will provide $50,000 a year forever for your heirs. The trust fund is going to be invested very conservatively so the expected rate of return is only 2.75%. How much money must you deposit today to fund this gift for your heirs?

• A) $1,333,333.33
• B) $1,375,000.00
• C) $1,425,000.00
• D) $1,666,666.67
• E) $1,818,181.82

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Definitions:

Partnership Liabilities

Debts or obligations for which partners in a business are mutually responsible.

Partnership Capital

The total resources contributed by partners to a partnership for carrying out its business activities.

Limited Liability Company

A Limited Liability Company (LLC) merges the partnership or sole proprietorship's benefit of pass-through taxation with a corporation's feature of limited liability.

Business Form

The legal structure or organization of a business, such as sole proprietorship, partnership, corporation, or limited liability company (LLC).