Estate_Examples_Solutions - HA 4422 Estate Planning...

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SIMPLIFIED EXAMPLES Estate Planning Situation Husband and Wife His Estate Her Estate Assets: Cash Accounts Joint Account 1,000,000 500,000 500,000 Investments Joint Account 800,000 400,000 400,000 House Owned Jointly 500,000 250,000 250,000 Cars Owned Jointly 50,000 25,000 25,000 His 401K 2,000,000 2,000,000 Primary beneficiary is wife Her IRA 1,000,000 1,000,000 Primary beneficiary is husband Life insurance on him Primary beneficiary is wife 2,000,000 2,000,000 Life insurance on her Primary beneficiary is husband 1,000,000 1,000,000 Liabilities: Mortgage on house -100,000 -50,000 -50,000 8,250,000 5,125,000 3,125,000 8,250,000 Assume all jointly held assets were purchased with joint funds or equally. Example 1: He dies His will leaves everything to the wife A) What is in the probate estate? Nothing B) What can his will do? Guardian for children, personal wishes Has no impact on transfer of assets C) What is his taxable estate? Zero D) What is her taxable estate should she die shortly after him? TOO MUCH!!!
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Estate_Examples_Solutions - HA 4422 Estate Planning...

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