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- Monique, 61, created a custodial account and transferred $15,000 to the account for the benefit of her great-great grandchild, Tony, and named Tony's father, Luis, as the custodian. It is Monique's desire that the money be used for Tony's college education. Monique's last will and testament bequests all of her property to Luis for his lifetime, with the remainder to Tony. Monique's estate is currently valued at $2,300,000, but she expects to increase her estate through real estate investments over the next 10 years. Monique has previously used $1,000,000 of her generation-skipping transfer tax (GSTT) exemption on an indirect skip person. Which one of the following statements is CORRECT regarding the GSTT? A)The transfer of the $15,000 into the custodial account is statutorily exempt from GSTT since it is to be used for the payment of tuition expenses. B)The transfer pursuant to the last will and testament qualifies for the deceased parent skip rule. C)The transfer of the…Mr. Franklin is 70 years of age, is in excellent health, pursues a simple but active lifestyle,and has no children. He has interest in a private company for $90 million and has decidedthat a medical research foundation will receive half the proceeds now and will be the primarybeneficiary of his estate upon his death. Mr. Franklin is committed to the foundation’swell-being because he believes strongly that, through it, a cure will be found for thedisease that killed his wife. He now realizes that an appropriate investment policy and assetallocations are required if his goals are to be met through investment of his considerableassets. Currently, the following assets are available for use in building an appropriateportfolio for him:$45.0 million cash (from sale of the private company interest,net of a $45 million gift to the foundation)$10.0 million stocks and bonds ($5 million each)$ 9.0 million warehouse property (now fully leased)$ 1.0 million value of his residence$65.0 million total…Rudabeh, 34, and Donovan, 31, want to buy their first home. Their current combined net income is $66 comma 00066,000 and they have two auto loans totaling $34 comma 00034,000. They have saved approximately $10 comma 00010,000 for the purchase of their home and have total assets worth $ 56 comma 000$56,000, which are mostly savings for retirement. Donovan has always been cautious about spending large amounts of money, but Rudabeh really likes the idea of owning their own home although she hasn't expressed her preference to Donovan. They do not have a budget, but they do keep track of their expenses, which amounted to $ 58 comma 000$58,000 last year, including taxes. They pay off all credit card bills on a monthly basis and do not have any other debt or loans outstanding. Other than that, they do not spend a great deal of time tracking their finances. a. What financial statements should Rudabeh and Donovan prepare to begin realizing their home purchase goal? What records…
- Jill's spouse Bob died six months ago. Their daughter is 20 years old and in university. Bob did not have a Will. As Jill is the surviving married spouse, she will receive $200,000 and then she and her daughter will each receive 50% of the remainder. The $200,000 refers to the dollar value of the estate assets that are distributed to the surviving spouse before the assets are distributed among all potential beneficiaries. This $200,000 is called. A holograph assets В preferential share C liquidation assets notarized share E widower's shareJane has a gross estate estimated at $12 million. Approximately 75% of her estate is attributable to the value of personal property and collectible items. Jane is married but has no children. Her husband does not have a large estate because he spends money freely and foolishly. Since Jane is much older than her husband, she would like for him to benefit from her wealth after her death without giving him control over the principal either while he is alive or at his death. Jane wants as little of her estate assets as possible to go toward payment of estate taxes. She currently has no will but has come to you for advice regarding provisions she should put in a will. Which provision, if placed in her will, would be best to increase the liquidity of her estate and accomplish her other goals? A) Establish a testamentary trust naming her husband as the income beneficiary and trustee B) Establish a power of appointment trust naming her husband as the income beneficiary and a…Would you sign this return if you were Tom and Teri’s Paid Tax Preparer? Why or why not? Your clients, Tom (age 48) and Teri (age 45) Trendy, have a son, Tim (age 27). Tim lives in Hawaii, where he studies the effects of various sunscreens on his ability to surf. Last year, Tim was out of money and wanted to move back home and live with Tom and Teri. To prevent this, Tom lent Tim $20,000 with the understanding that he would stay in Hawaii and not come home. Tom had Tim sign a formal note, including a stated interest rate and due date. Tom has a substantial portfolio of stocks and bonds and has generated a significant amount of capital gains in the current year. He concluded that Tim is a deadbeat and the $20,000 note is worthless. Consequently, Tom wants to his son’s bad debt on his and Teri’s current tax return and net it against his other capital gains and losses. Tom is adamant about this!
- 30 After reviewing her financial affairs, Jasmine has determined that she would like the $75,000 death benefit from one of her insurance policies to go to a local registered charity. The whole life policy in question has a $45,000 cash surrender value (CSV) and she pays an annual premium of $500. Jasmine's current cash flow situation is quite good. She is living a comfortable retirement. However, she is worried as she has assets, that of the taxes that will be payable after her death will result in considerable capital gains. She is unable to purchase a new life insurance to cover the income tax triggered at death because of her health. What should Jasmine do to fulfill her desire to donate $75,000 to the registered charity and alleviate the taxes payable following her death? NVBDQncreUJQWW1 Ya0w4cWZjYVhIQT09 → a. O Surrender the life insurance policy and donate the CSV. b. O Name the registered charity as beneficiary of the life insurance policy. c. O Assign the life insurance policy…Tim and Allison are married and have two children, ages 8 and 13. Allison is a "nonworking" spouse who devotes all of her time to household activities. Estimate how much life insurance Tim and Allison should carry to cover Allison. Life insurance need14. Françoise has just inherited $90,000. In the event of her own death, she would like to leave this money to ensure the financial security of her son Maxime He is 18 years old and recently entered college to study philosophy. Françoise is a self-employed landscaper and snow-removal contractor. She recently had to take out loans to upgrade her equipment. Françoise is not sure whether she should invest her inheritance in a segregated fund with Maxime as the beneficiary or build an equity portfolio with better returns. Her priority is to provide for her son's future. If she were to one day declare bankruptcy, would the two investments Françoise is considering be protected from creditors? Only the segregated fund would be protected. Only the equity portfolio would be protected. O Both investments would be protected. ONeither investment would be protected. Choose 1 option
- Cheryl and Terrell have been married for 35 years. Cheryl turned 71 on May 5, 2023, and had a big celebration. Terrell's 67th birthday is coming up on January 16, 2024. Cheryl has already started planning for his birthday. Cheryl is the financial guru in the family and knows to convert her Registered Retirement Savings Plan (RRSP) to a Registered Retirement Income Fund (RRIF) before December 31, 2023. She estimates that the Fair Market Value (FMV) of her RRIF on January 1, 2024, will be $792,500. She knows that her spouse's age is important in the RRIF withdrawal calculation. She estimates that Terrell's Registered Retirement Savings Plan (RRSP) investments will have a Fair Market Value on January 1, 2024, of $488,325. Based on the information Cheryl provided, what is the minimum amount she must withdraw from her RRIF amount in 2024, taking advantage of Terrell's age? Age and RRIF Factors RRIF Factors 4.00% 4.17% 4.35% 4.55% 4.76% 5.00% 5.28% 5,40% 5.53% 5.67% Age 65 66 67 68 69 70 71…Cora, 79, has an estate that includes her personal residence valued at $120,000 and $18,000 in a bank account that is solely in her name. She would like to arrange her estate so that she maintains exclusive control of the assets during her lifetime, but at her death the assets will pass to her friend, Mabel, outside of probate. Based on Cora's goals and situation, which of the following are correct statements about will substitutes that she could use? She should put her bank account in tenancy in common with Mabel. She should title her personal residence in joint tenancy with her friend, Mabel. She should execute a will that names her friend, Mabel, as the legatee of the bank account and the devisee of the personal residence. She should place the bank funds in a payable on death (POD) account with Mabel as beneficiary. She should change the title on her personal residence to indicate a life estate reserved for her lifetime and a remainder to her friend, Mabel. A)IV and V…Susan and Raphael Galego have completed Step 1 of their needs analysis worksheet and determined that they need $3,522,000 to maintain the projected lifestyle of Raphael (age 41) and their two children (ages 7 and 11) in the event of Susan’s (the primary earner’s) death. The Galegos also have certain financial resources available after Susan’s death, however, so their life insurance needs are lower than this amount. If Susan dies, Raphael will be eligible to receive Social Security survivors’ benefits—approximately $3,500 a month ($42,000 a year) until the youngest child graduates from high school in 9 years. After the children leave home, Raphael will be able to work full-time and earn an estimated $52,000 a year (after taxes) until he retires at age 65. After Raphael turns 65, he’ll receive approximately $3,100 a month ($37,200 a year) from his own Social Security and retirement benefits. The life expectancy for a man within Raphael’s demographic is 80. The couple has also saved…
