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1. An annuitant who is the beneficiary of a testamentary gift annuity does not pay income tax on any part of the annuity payments because of the estate step-up in basis.

True False

2. The proper method for creating a testamentary gift annuity is for a donor in his or her will or living trust to direct the executor or trustee to fund the gift annuity.

True False

3. Since the estate probate process will take some time, it is permissible for an immediate gift annuity to have an annuity starting date several months after the decedent passes away.

True False

4. A child is a common and appropriate beneficiary for a testamentary gift annuity.

True False

5. The beneficiary of a testamentary gift annuity qualifies for an income tax deduction.

True False

6. The testamentary gift annuity must pay the standard rate specified by the American Council on Gift Annuities.

True False

7. A testamentary gift annuity for a child will not be subject to estate tax.

True False

8. With a testamentary gift annuity, the charity should seek to have the personal representative fund the annuity quickly.

True False

9. A testamentary gift annuity is contingent upon the beneficiary surviving the donor.

True False

10. A testamentary deferred payment gift annuity for a child is often a better choice than an immediate gift annuity.

True False

Basic Quiz - 3.4.3 Testamentary Gift Annuity