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ArbitrLikvidat [17]
3 years ago
7

Paul would like to transfer a substantial portion of his net worth to his son, Chad. Paul believes that the assets will apprecia

te in value before his death, but Paul does not need any of the assets to sustain his current standard of living. However, Paul is concerned about Chad’s ability to manage the assets and is afraid Chad may squander the assets. Of the following transfers, which would ensure that the assets are excluded from Paul's gross estate and could also ensure that Chad cannot squander the assets?
A. An Irrevocable Trust.
B. An Outright Transfer.
C. An Installment Sale.
D. A Grantor Retained Annuity Trust.
Social Studies
1 answer:
mr_godi [17]3 years ago
7 0

Answer:

A. An Irrevocable Trust.

Explanation:

An Irrevocable Trust is one of the types of trust in which the terms and conditions are not in terms to go through any modification or change. Any amendment or termination is not subject to in Irrevocable trust. For any such amendment, the permission of the beneficiary is required.  

In the given situation, Paul is excluded from possessing the ownership of the assets. At the same time, to access any of the asset, Chad would require to provide the purpose of the expenditure.

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