Estate Planning Case Summary
FIN 4385-01
Case II: Executive Summary
For the past several weeks, BJSMC conducted a comprehensive estate plan providing a structural outline of our client’s, Scott, estate opportunities and limitations subject to specific request. Our client provided us with the following scenarios: 1). If Scott dies this year, predeceasing Sue, and his executor elected his date of death as the valuation date, indicate those assets (and their values) that would be includible in Scott’s gross estate for estate tax purposes. Also, please explain your reason for the inclusion or exclusion of each asset. 2). Based on Scott’s current estate plan, indicate those assets and their values that would qualify for marital deduction. Explain 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 established the following resolutions to scenario I:
• The “Catchall Provision” of Internal Revenue Coded states the general rule that the gross estate includes the value of all property interests, real or personal, tangible or intangible. Under Section 2033, the decedent’s estate includes any interest in real estate, cash or money equivalents, whether kept in a bank, savings or checking account, certificates of deposit, money market funds, or a safe-deposit box. The gross estate also includes any stocks, bonds (including tax-exempt bonds), notes and mortgages owned by the decedent. Therefore, the full values of the following assets are included in Scott’s gross estate under IRC Sec. 2033 since he is the sole owner: o Stock in XYZ Corporation (500 shares) o Other listed common stock o Tax-free municipal bonds o Savings accounts o Household and other tangible personal property
• Section 2033 may also apply to inclusion of life insurance. If a decedent owns a life insurance
Case II: Executive Summary
For the past several weeks, BJSMC conducted a comprehensive estate plan providing a structural outline of our client’s, Scott, estate opportunities and limitations subject to specific request. Our client provided us with the following scenarios: 1). If Scott dies this year, predeceasing Sue, and his executor elected his date of death as the valuation date, indicate those assets (and their values) that would be includible in Scott’s gross estate for estate tax purposes. Also, please explain your reason for the inclusion or exclusion of each asset. 2). Based on Scott’s current estate plan, indicate those assets and their values that would qualify for marital deduction. Explain 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 established the following resolutions to scenario I:
• The “Catchall Provision” of Internal Revenue Coded states the general rule that the gross estate includes the value of all property interests, real or personal, tangible or intangible. Under Section 2033, the decedent’s estate includes any interest in real estate, cash or money equivalents, whether kept in a bank, savings or checking account, certificates of deposit, money market funds, or a safe-deposit box. The gross estate also includes any stocks, bonds (including tax-exempt bonds), notes and mortgages owned by the decedent. Therefore, the full values of the following assets are included in Scott’s gross estate under IRC Sec. 2033 since he is the sole owner: o Stock in XYZ Corporation (500 shares) o Other listed common stock o Tax-free municipal bonds o Savings accounts o Household and other tangible personal property
• Section 2033 may also apply to inclusion of life insurance. If a decedent owns a life insurance