Estimating the Size of an Estate. Christopher Marcos, of Santa Clarita, Californ

Question

Estimating the Size of an Estate. Christopher Marcos, of Santa Clarita, California, died recently without a valid will. His probate estate for federal estate tax purposes was $3.2 million. Christopher's wife, Amanda, and three children were his only survivors. Answer the following questions, assuming that Christopher's state of residence followed the typical guidelines of division (one-half for the spouse with the children equally splitting the remainder): What will be the dollar amount of the division of assets for the wife and children? If Amanda has personal assets (beyond her inheritance from Christopher) that have a fair market value of $400,000, when she dies, how much will her estate total? If Amanda now died without a will in 2011, what will be the dollar amount of the division of assets, assuming that she has no other children? Assuming Amanda's estate paid $15,000 for her funeral expenses, $14,000 for probate costs, and $180,000 to pay off the remaining debts and mortgages, what was Amanda's taxable estate before subtracting the exclusion amount?

Explanation / Answer

a) one half goes to Amanda.
So, Amanda gets $1.6 million

and, each children gets $1.6/3 = $ 0.53 million

b)total estate when she dies = $ 1.6 x 1,000,000 + $400,000 = $ 2,000,000

c)dollar amout of divison of assets = ($ 0.4 million + $ 3.2 million) /3 to each children = $1.2 million to each child of theirs.

d)Amanda's taxable estate beforesubtracting exclusion amount = $400,000 + $ 1,600,000 - $209,000

= $ 1,791,000

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