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GiftLaw Pro Home   >  Chapter 6 - Charitable Deduction Methods  >  6.7 Remainder Unitrusts  >  6.7.4 Education Unitrust  >  Basic Quiz

Basic Quiz - 6.7.4 Education Unitrust

1. An education unitrust allows a donor to provide for the college education of a spouse.
           
2. It is best to fund an education unitrust with cash.
           
3. Because the education is paid for by the donor, the donor has made a gift to a non-charitable entity and does not receive an income tax deduction.
           
4. If all of the current and successor beneficiaries pass away prior to the term of years, the trustee may name new beneficiaries.
           
5. Donny Donor is creating an education unitrust for his two nieces. Unless Donny Donor retains a testamentary right of revocation, he is making a gift to his nieces in the year the trust is created.
           
6. When a donor creates an education unitrust, the gift is equal to the total gift value less (1) any marital deduction, (2) the annual exclusion for each student and (3) the charitable income tax deduction, which is the present value of the remainder interest.
           
7. A donor does not need to consider the impact of the annual gift exclusion for each student when he or she creates an education unitrust.
           
8. An education trust typically pays a fairly high amount for a term of four or five years.
           
9. The selected term of years is used to determine the amount of the donor's charitable income tax deduction.
           
10. The donor pays income tax on the distributions.