Terry Is Considering Transferring Assets Valued at $400,000 to an Irrevocable

question 5

Essay

Terry is considering transferring assets valued at $400,000 to an irrevocable trust for the benefit of her son, Cliff, age 15, with First National Bank as trustee. Her attorney has drafted a trust agreement that provides that Cliff is to receive income at the trustee's discretion for the next 20 years and that at age 35, the trust assets will be distributed equally between Cliff and his sister Joanna. Terry anticipates that her husband will consent to gift splitting. What tax issues should Terry and her husband consider with respect to the trust she is creating?

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Definitions:

Empowerment

The process of granting individuals or groups more autonomy and control over their work or decision-making processes, enhancing their sense of effectiveness.

Values And Beliefs

Core principles and assumptions that guide behavior and decision-making within an organization or individual.

Influence

The capacity to have an effect on the character, development, or behavior of someone or something, or the effect itself.

Negative Feedback

A process where a system responds in a manner that reverses the direction of a change, often used in the context of communication and performance improvement within organizations.