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Which of the following life insurance settlement options will qualify for the federal estate tax marital deduction?
l. Proceeds left to the surviving spouse under the interest option, with interest payable to the surviving spouse who has the unrestricted right to withdraw proceeds and with any proceeds
not withdrawn payable equally to her children per stripes
II. Proceeds left to the surviving spouse under an installment option, with any installments remaining at her death to be commuted and paid to her estate
Suggested Answer: D
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34 comments · newest first
ED
Edelmira
10 months ago
Interesting! I didn't know the details about the interest option before.
ED
Edgar
11 months ago
Nope, only option I qualifies. II has issues with the estate.
JA
Jani
11 months ago
Wait, are you sure about that? I thought both options could qualify.
NI
Nidia
11 months ago
Definitely agree with that, I learned it in my tax class!
DE
Deonna
11 months ago
I think option I qualifies for the marital deduction.
DE
Delfina
12 months ago
I feel like neither option qualifies, but I can't recall the specific rules about the marital deduction clearly.
DO
Dortha
12 months ago
I practiced a similar question, and I believe both options could be tricky, but I lean towards just option I qualifying.
ST
Staci
12 months ago
I'm not entirely sure, but I remember something about installment options not qualifying if they go to the estate.
EM
Emiko
1 year ago
I think the interest option might qualify for the marital deduction since the spouse has the right to withdraw proceeds.
ZA
Zack
1 year ago
This is a tough one, but I'm going to give it my best shot. I'll start by identifying the key factors the question is asking about, then carefully evaluate each option against those factors.
CA
Carlota
1 year ago
Okay, I've got a strategy for this. I'll break down each option and analyze how the surviving spouse's rights and the distribution of proceeds align with the marital deduction requirements. That should help me determine the correct answer.
WI
Willodean
1 year ago
Hmm, I'm a bit confused by the wording here. I'll need to re-read the question a few times to make sure I understand all the key details before attempting an answer.
ME
Meaghan
1 year ago
This question seems tricky, but I think I can work through it. I'll need to carefully review the details of the two life insurance settlement options and how they relate to the federal estate tax marital deduction.
RE
Rex
1 year ago
I heard the IRS is offering a special deduction for anyone who can correctly answer this question without falling asleep.
MI
Mike
1 year ago
C) Both I and II
MA
Margarett
1 year ago
B) II only
CA
Carey
1 year ago
A) I only
GL
Glennis
1 year ago
I'm so tired of these life insurance settlement questions. Can we just get a multiple-choice question about the latest celebrity gossip instead?
SH
Shanda
1 year ago
Agreed, let's talk about something more interesting.
IS
Isreal
1 year ago
I'm with you, these questions are exhausting.
AN
Andrew
1 year ago
Both I and II
AM
Ammie
1 year ago
I only
CH
Chanel
1 year ago
Oh, this is a tricky one! I'm going to go with Option D just to be safe. I don't want to risk getting it wrong and having the IRS knocking on my door.
EV
Eva
1 year ago
I'm leaning towards Option B. The installment option where the remaining installments are paid to the surviving spouse's estate seems to be the only one that qualifies.
JE
Jerry
1 year ago
I agree, the installment option seems to be the one that qualifies.
AL
Alysa
1 year ago
I think Option B is the correct one.
PA
Patria
1 year ago
Why do you think that? Can you explain your rationale?
LA
Lanie
2 years ago
Option C seems right, since the life insurance proceeds left to the surviving spouse under both the interest and installment options would qualify for the federal estate tax marital deduction.
LE
Lenna
1 year ago
D) Neither I nor II
TR
Truman
1 year ago
C) Both I and II
ME
Melinda
1 year ago
B) II only
GW
Gwen
1 year ago
A) I only
LI
Lindy
2 years ago
I disagree, I believe the answer is C) Both I and II.
PA
Patria
2 years ago
I think the answer is A) I only.