Which, If Any, of the Following Procedures Reduces Both Ned's

question 56

Multiple Choice

Which, if any, of the following procedures reduces both Ned's gross estate and probate estate?

• A) Ned purchased a CD listing title as "Ned, payable on proof of death to Eileen." Eileen is Ned's niece.
• B) Four years ago, Ned named his wife as the designated beneficiary of his IRA. (Previously, Ned's estate was the designated beneficiary.)
• C) Using her funds, Ned's wife purchased real estate listing herself and Ned as "tenants by the entirety with right of survivorship."
• D) Five years ago, Ned made a gift of an insurance policy on his life to his daughter (the designated beneficiary).
• E) None of the above.

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Definitions:

Present Value

Present Value is a financial principle that calculates the current worth of a future amount of money or stream of cash flows given a specific rate of return.

Compound Interest

Interest calculated on the initial principal and also on the accumulated interest of previous periods.

Future Value

Future Value is the estimated amount of money an investment is projected to be worth at a specific date in the future, taking into account factors like interest rates or earnings.

Compounded Semiannually

The process of applying interest to both the initial principal and accumulated interest over two periods within a year.