Cassandra and Julius Silverstone are a married couple who have come to you for f
ID: 2626139 • Letter: C
Question
Cassandra and Julius Silverstone are a married couple who have come to you for financial and estate planning. Their primary goal is to minimize estate and gift taxes. Their children are married and doing well so their main concern is to maintain their lifestyle regardless of which of them passes first. They love their Uncle Sam but would like to disinherit him if at all possible.
Cassandra and Julius own the following assets together: (You may assume that they do not live in a community property state.)
Checking Account $110,000
Savings Account $100,000
Municipal Bonds $200,000
Primary Residence $6,000,000
Vacation Home $2,940,000
Julius owns the following assets in his own name:
IRA Account $1,000,000
Mutual Fund Accounts $1,100,000
401(k) Account $1,000,000
Little Red Corvette $110,000
Cassandra owns the following assets in her own name:
Credit Union Account $250,000
Stock Account $1,250,000
403(b) Account $1,500,000
Lexus $120,000
Cassandra and Julius have a personal loan account (Joint) with a balance of $100,000. They estimate that funeral expenses would run approximately $25,000 (each). They have a mortgage on their residence in the amount of $1,200,000.
Five years ago, Julius purchased a VUL policy with a Death Benefit of $5,000,000. Two years ago, Cassandra purchased a UL policy with a Death Benefit of $2,500,000. Each named their spouse as the primary beneficiary.
1. What is the value of Julius
Explanation / Answer
Cassandra's Gross estate= $(250,000+1,250,000+1,500,000+120,000-100,000-25,000-1,200,000)=$1795,000
Since Joint assets are the ones where both are held beneficiary, they can't be included in gross estate, similarly policies can't be included in gross estate. Meanwhile Mortgage of residence and funeral expense and personal loan account ammount is deducted from eachs gross estate.
Similarly,
for Julius =$(1,000,000+1,100,000+1,000,000+110,000 -100,000-25,000-1,200,000)=$1885,000
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