This question is a part of BIF's Special Webinar series which was created to help students affected by the July 2020 CFP® Exam postponement to September 2020.
Match each grantor-retained trust to the correct description:
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1. GRIT
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A. Grantor receives access and possession for trust term.
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2. GRAT
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B. Grantor receives either a fixed payment or a percentage of the initial FMV of the transferred property.
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3. GRUT
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C. Grantor receives either a payment based on a fixed percentage of the transferred property or all income generated from the transferred property.
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4. QPRT
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D. Grantor receives a payment calculated annually by applying a fixed percentage of the current FMV of the transferred property.
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Correct answer:
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1. GRIT
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C. Grantor receives either a payment based on a fixed percentage of the transferred property or all income generated from the transferred property. |
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2. GRAT
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B. Grantor receives either a fixed payment or a percentage of the initial FMV of the transferred property. |
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3. GRUT
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D. Grantor receives a payment calculated annually by applying a fixed percentage of the current FMV of the transferred property. |
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4. QPRT
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A. Grantor receives access and possession for trust term. |
Instructor insight:
CFP® Exam insight:
Keep the unique planning opportunities offered by each of the testable trusts on the CFP® Exam top of mind. Think to yourself, “How can this specific trust maximize the client’s potential to achieve their stated goals?”