Estate Planning

atomic number 23 4385-01 Case II Executive Summary For the historic several weeks, BJSMC conducted a comprehensive acres see providing a structural outline of our clients, Scott, body politic opportunities and limitations subject to specific request. Our client provided us with the by-line scenarios 1). If Scott dies this year, predeceasing sue, and his executor elected his designation of death as the paygrade date, indicate those assets (and their jimmys) that would be includible in Scotts plebeian commonwealth for estate tax purposes.Also, please explicate your reason for the inclusion or exclusion of separately asset. 2). Based on Scotts current estate intend, indicate those assets and their values that would qualify for matrimonial deduction. excuse your reasons for the qualification or non-qualification of each asset for the marital deduction. Based on factual information, hard-copy documentation, and professional experience, BJSMC open up the following resoluti ons to scenario I The Catchall Provision of Internal double-dyed(a) Coded states the general govern that the pull in estate includes the value of all spot interests, genuine or personal, obvious or in discernible. Under Section 2033, the deceased persons estate includes any interest in veridical estate, cash or money equivalents, whether kept in a bank, savings or checking account, certificates of deposit, money marketplace funds, or a safe-deposit box. The gross estate excessively includes any stocks, bonds (including tax-exempt bonds), notes and mortgages owned by the decedent.Therefore, the full values of the following assets are include in Scotts gross estate infra IRC Sec. 2033 since he is the sole owner o striving in XYZ kitty (500 shares) o Other listed mutual stock o Tax-free municipal bonds o Savings accounts o Household and other tangible personal lieu Section 2033 may also apply to inclusion of life insurance. If a decedent owns a life insurance indemnity on his or her own life at the date of death, the face amount of that indemnity must be include in the gross estate consistent to Section 2042(2).This section establishes a standard regarding nonessential of ownership whereby the owner of a life insurance policy is required to include the proceeds in the gross estate in the event that he or she possessed any incidents of ownership. In this case, it is specifically mentioned that Scott owns intravenous feeding life insurance policies on his own life. Therefore, the following items are include in Scotts gross estate under(a) IRC Section 2040 o unremarkable life policy purchased at age 23 o 20 payment life policy purchased at 34 Ordinary life policy purchased at age 37 o stipulation to 65 policy purchased at age 44 Under IRC Section 2039, the total value of the net-sharing plan and death benefit plan would be include in Scotts gross estate. o XYZ Corporation pension (noncontributory) death benefits o XYZ Corporation profit sharing (noncontributory) death benefits A special govern was enacted to control the estate taxation of reciprocal place with right of survivorship held solely by husband and married woman as well as station held as tenants by the entirety.Section 2040(b) (1) pertains to the one-half inclusion rule for pardners. The rule is that one-half the value of such property, regardless of which cooperator furnished all or part of the consideration, is included in the gross estate of the first spouse to die. Therefore, half the values of the following assets are included in Scotts gross estate o Residence purchased in 1987 o Vacation hearth o Checking account All property held in stick tenancy with right of survivorship by joint tenants other than a husband and wife unaccompanied is treated under a different rule.The property is included in a deceased joint tenants estate according to a percentage-of-contribution rule. Scott and Dan own the following property equally as tenants in c ommon therefore, half the value of the listed property provide be included in Scotts gross estate o Undeveloped real estate The property that Sue solely owns in her name (Saving account & other personal property) will not be included in Scotts gross estate. Property and property interests that are includible under Section 2033 are those that are owned by the decedent.Scott doesnt have any rights of ownership to Sues property in her name. Based on factual information, hard-copy documentation, and professional experience, BJSMC established the following resolutions to scenario II Qualifying Marital Deductions $246,000 death benefit o Included in Scotts gross estate $30,000 and $200,000 ordinary o Payable to Sue in a lump sum $377,000 of joint property o Right of survivorship $700,000 property passing o Passed to Sue outright Non Qualifying Marital Deductions & discernment $70,000/20-payment life insurance policy o not payable to Sue