I am only looking for the

I am only looking for the

I am only looking for the calculations of assets not to write the paper!Rich and his wife, Ruby, heard that you are an expert in the field of Estate Planning as a result of the superior education you received at WPU. They have been thinking about planning their estate for a long time now and have gone to a number of financial planners who have not been able to design a plan that makes sense to them. So they come to you for help.Rich is age 58, and his wife, Ruby, is age 57. They have been married for 15 years and live at 4 Glendale Avenue, Wayne, NJ. They have a son from this marriage, Alvin, age 26, who is happily employed in the company business. Alvin is married to Arlene and they have two children, James age 6, and Jenny age 5. Both children attend a very exclusive and expensive private school. Ruby also has a daughter, Katie, from a previous marriage to Norman who passed away 20 years ago leaving Ruby assets in the amount of $300,000. Katie is age 24 and is not married. She is in school working on her doctorate degree in bio-gastric anthropology and is employed by Intestinal Labs, Inc. She makes about $105,000 a year and expects significant increases after she completes her degree which she expects will take approximately two (2) more years..Katie also has a life partner, Caryn, who she has been with for three (3) years. Ruby likes Caryn and appreciates that Katie is happy in their relationship. However, she knows that Caryn is not financially secure and also knows that right now Katie would want to provide for Caryn if she ran into financial difficulty should Katie die. Ruby wants to advise Katie regarding the best strategies to consider in providing for Caryn knowing that Rich, his family and Ruby?s family all do not approve of this relationship and question Caryn motives. She would not want to advise Katie to do something that could not be undone should their relationship not work out. Both Alvin and Katie live in NJ.Rich graduated from Podunk Polytechnical University with a degree in civil engineering and is the 100% owner (and 100% voting member) of Macadam Company which is a Limited Liability Company that specializes in building and repairing roads, parking lots and other infrastructure. The company has 20 employees including Rich?s son, Alvin, and its annual net income is about $500,000. This is after Rich and Alvin both take an annual salary of $200,000.Alvin plays an important role in the management of Macadam. Rich feels that the company is worth about $6,000,000, and expects its revenue and value to grow by about 10 to 15% over the next 6 to 8 years. Alvin has expressed a strong desire to continue the business after Rich retires or dies and Rich wants to transfer some and eventually all of the business to Alvin, but still maintain the lifestyle that he and Ruby currently enjoy. Ruby is a stay at home mom.Rich also owns a building outright at 123 Money Road, Fairfield, NJ. Macadam Company operates from this location and pays rent to Rich under a triple net lease. He estimates the net income from the building to be $160,000 and the value to be $2,000,000. There is a lot of activity at this location and Rich is concerned about his liability should there be an accident on the premises.In your data session you also find out that Rich?s parents, Henry and Harriet, were married for 55 years and had two children, Rich and his sister, Rebecca. During their marriage, Henry and Harriet made annual gifts to each of their children up to the allowable annual exclusions. Henry and Harriet each had Credit Shelter/Bypass Trust Wills with the balance of their estate going to the surviving spouse. Henry died in 2011 at age 85 with a gross estate of $10.0 million. Henry?s Will was probated and his estate administered. When the estate administration was completed, Henry?s executor funded his Bypass Trust with the full applicable credit exemption amount for 2011 ($5,000,000). The trust is designed to remain in place for Harriet?s benefit and be distributed equally to Rich and Rebecca when Harriet dies. The provisions of the Bypass trust also gave Harriet an inter vivos and testamentary limited power of appointment to distribute the assets of the trust among a class of beneficiaries which consists of Henry?s descendants. The balance of his estate passed to Harriet outright. Under the provisions of Harriet?s Will, since she survived Henry, her net estate passes equally to her two children, if living, and if a child predeceased Harriet, then to that child?s living descendants, per stirpes, if any, otherwise to the surviving child, if living, otherwise to that child?s living descendants, per stirpes.Rebecca, Rich?s sister, is age 49. She is not as financially successful as her brother, Rich, or as her parents. Rebecca is a working mother with one son, Robbie, who is 16 years old. Her husband, Robert, was in his own business and was making ends meet until an auto accident resulted in him being paralyzed and unable to work from 2004 until now. The medical bills have been excessive and Rebecca has only been able to meet them with the money gifted to her by her parents over the years. While Robert and Rebecca are loving parents to Robbie, neither has any acumen when it comes to finances and managing money. Rich is very concerned about his sister?s situation and would like some ideas as to how he and/or Harriet can help her.They give you a copy of their net worth statement which is attached as Exhibit ?A?.They also bring you a copy of their Wills which were executed in 2000. Rich?s Will provides for a Specific Bequest of $500,000 to his college alma mater. Both Wills provide that the remaining estate will pass to the other spouse, if living, otherwise equally to Alvin and Katie, if living, and if either child is not living, then to the deceased child?s surviving descendants, per stirpes. Rich would like to explore other more efficient methods of charitable giving which possibility could result in a charitable deduction today without giving up the income from the asset.In your discussion during the meeting you also find out that Rich feels that his Will is outdated and needs to be updated to have his estate benefit Ruby and his descendants more effectively and efficiently. He also wants to make sure that Ruby has access to his estate assets should Rich die first, but also that only Alvin and his descendants receive his assets when Ruby dies. He expresses that Ruby is a good wife and loving mother, as well as a very attractive woman who would be a ?great catch? for some guy after Rich is gone.Rich also realizes that his estate has grown significantly, and will continue to grow in the years to come. He also realizes that his estate will increase as a result of the inheritance that he will receive from his father?s and mother?s estate. He is not opposed to starting a gift giving program if it makes sense and if it provides him and Ruby with enough resources to enjoy their remaining years and live out their lives in comfort. He estimates that he would need approximately $250,000 to live comfortably in retirement. He also wants to make sure that all of his estate including the business, goes ultimately to Alvin and that Alvin has control of the business. Eventhough Rich doesn?t agree with Katie?s lifestyle, he still wants to set some money aside for Katie so that someone other than Katie has discretion to make distributions to Katie should an emergency situation arise. Ruby is not interested in making any gifts now, but will cooperate in any gifting plan to the family or to charity that makes Rich happy.Your assignment is to devise an estate plan for Rich and Ruby. The facts of the case and the clients? Statement of Financial Position should be reviewed in detail with particular attention to the titling and location of assets. As part of your plan presentation, you should calculate how much Rich will receive from his parents? estate after all the federal estate taxes are paid. In estimating the federal estate tax, assume that Harriet dies in 2014 with an estate of $15,340,000. It is not necessary to take state death taxes into account. Harriet has been living on the growth and income from her estate so assume no growth. You should also explain the difference between probate and non-probate assets and which one is more advantageous in their estate plan and suggest the use of documents other than their Last Will & Testament that will accomplish their objectives. You should show Rich and Ruby a calculation of Rich?s probate estate assuming Rich dies first, as well as a calculation of the amount of federal estate taxes that will be due based on their current plan should Rich die today and Ruby dies immediately thereafter. Assume that their deaths occur after Harriet?s assumed death (apply a $5.34 million estate tax exemption and assume no credit for tax on property previously taxed).You should also discuss revisions to the clients? Wills, if appropriate, and a discussion of any other documents that will pass the assets to and/or for the use of their descendants in an effective and efficient manner. Also, make recommendations as to how assets should be titled to implement the plan and whether additional documents should be put in place. You should also discuss gifting strategies that will reduce Rich and Ruby?s gross estate. Any gifting recommendations should include a discussion of the federal gift tax law, leverage gifts and why your recommended gifting plan makes sense. You should include a strategy to provide liquidity to the estate to pay any estate taxes due and to possibly provide for assets for Katie?s benefit. Rich also heard of a new strategy called ?Portability?. It is his understanding that Portability allows the surviving spouse to utilize the unused estate tax exemption of the first spouse to die and that this would eliminate the need for planning at the death of the first spouse to die. He would like your comments on this strategy.Feel free to discuss any other objectives that you think Rich and Ruby should consider, and any other planning ideas that you feel are appropriate, including any recommendations that Harriet should consider to meet the family objectives that you will identify.Remember that Rich is a very busy entrepreneur and wants your presentation to be thorough, organized and concise. I suggest that you structure your plan by first listing all your observations and your clients? objectives as you see them. You should then itemize your recommendations. The narrative part of your plan should be no more than 4-5 pages one and one-half spaced with a 12 point font. Calculation of the probate estate and your estate tax calculations can be shown separately.When doing an estate plan, knowledge as well as communication is important. It is just as important for your grade. So write your plan with clarity, good grammar and accurate spelling so that I will enjoy reading it. You will lose points if the above directions are not followed.

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