In 1985, Drew creates a trust with $1,000,000 of securities. Under the terms of the trust, Paula (Drew's wife) is granted a life estate with remainder to their children. Drew makes a QTIP election as to the trust. Drew dies in 1992 when the trust is worth $1,500,000, and Paula dies in 2016 when the trust is worth $2,000,000. Which, if any, of the following is a correct statement?

Question

Quizplus · Accepted Answer

When a QTIP election is made, the trust property is included in the surviving spouse's gross estate upon their death. Therefore, the entire value of the trust ($2,000,000) is included in Paula's gross estate when she dies in 2016.

In 1985, Drew Creates a Trust with $1,000,000 of Securities