In order to avoid the deemed disposition of all assets that

In order to avoid the deemed disposition of all assets that must be declared in the deceased’s terminal income tax return, which type of trust would be most appropriate? a) Testamentary b) Revocable inter vivos c) Alter ego d) Spousal

Solution

Solution: Spousal

Explanation: When the trust was created for a motive that is no longer relevant, it can avoid the deemed disposition rule by distributing the trust property and terminating the trust prior to the 21st anniversary, and thus to avoid the deemed disposition of all assets that is required to be declared in the deceased’s terminal income tax return, spousal trust is most appropriate