A woman recently died with only probate assets. Under the term of her will, she

Question

A woman recently died with only probate assets. Under the term of her will, she left her entire probate estate outright to her husband. The following are relevant facts concerning the estate.

Gross estimate $1,950,000

Estate Administration Expenses 60,000

Debts of decedent 240,000

Allowable funeral expenses 5,000

The amount of the allowable marital deduction is:

(A) $1,645,000

(B) $1,650,000

(C) $1,885,000

(D) $1,890,000

Provide a detailed explanation for your answer. Only answer if you have a strong estate planning background.

Explanation / Answer

(A) $1645000

Note:- marital deduction is passing the net value of investment/ property to the surviving spouse

1.Estate administration expense of $60000 - Under section 2053, adimistration expenses are payable out of property and subject to claim, it will reduce the net value of investment/property

2.Debts of decedent of $240000 - Any debtness in respect of property passed from decedent to surviving spouse with a obligation to pay it off is allowable and claimable. Therefore, value of property will gte reduced.

3.Allowable funeral expenses of $5000 - funeral expense are the expense payable out of property and can be claimed as per Section 2053.

So , The value of investment after expense = $1950000 - 60000- 240000 - 5000

   = $1645000

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