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GiftLaw Pro Home   >  Chapter 3 - Deferred Gifts  >  3.5 Lead Trust  >  3.5.8 Lead Trust Generation-Skipping Transfer Taxation  >  Basic Quiz

Basic Quiz - 3.5.8 Lead Trust Generation-Skipping Transfer Taxation

1. Twenty years is the maximum period that a lead trust can last.
           
2. If lead trust assets are to be transferred to grandchildren and the parents are still living when the lead trust is created, generation skipping transfer taxes may apply to the transfer.
           
3. Only a gift tax or a generation skipping transfer tax, but not both, will apply to a charitable lead trust for grandchildren.
           
4. If a lead trust is created for grandchildren, it is best to choose a unitrust payout for the lead trust.
           
5. All generation skipping transfer taxes are paid at trust termination.
           
6. Gift taxes are due at the termination of the lead trust.
           
7. If an annuity payout is chosen for a lead trust to grandchildren, generation skipping transfer taxes will be applied for the entire value of the trust corpus at termination that is in excess of the augmented GST exemption.
           
8. In addition to the donor's lifetime gift tax exemption, he or she also has a generation skipping transfer tax exemption.
           
9. A donor can create multiple lead trusts so that principal passes to family at different times.
           
10. The longer the lead trust, the smaller the deduction.