October 2016 Handout 2

Assets - Current conditions FMV John Carol Residence (645K-244K= 401K equity Roth IRA - Carol Pension - cash value ...

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Assets - Current conditions

FMV

John

Carol

Residence (645K-244K= 401K equity Roth IRA - Carol Pension - cash value

$401,000.00 $14,000.00 $259,000.00

$401,000.00

RSU Options 401k IRA- John IRA - Carol Roth IRA - John Investment - broker Savings Checking Checking Checking

$113,000.00 $133,000.00 $577,000.00 $160,000.00 $38,000.00 $906,000.00 $60,000.00 $32,000.00 $34,000.00 $4,150.00

$113,000.00 $133,000.00 $577,000.00

Owner/Beneficiary

$14,000.00 this is only the cash value these are restricted. Thus, value is uncertain

$259,000.00

$160,000.00 $38,000.00 $906,000.00 $60,000.00 $32,000.00 $34,000.00 $4,150.00

TIAA-CREFF - Carol Private Life Ins - John

$100,000.00 $300,000.00

$300,000.00

Work Life Ins

$500,000.00

$500,000.00

Work Life Ins

$50,000.00

$50,000.00

Work Travel Life Ins

$1,000,000.00

$1,000,000.00

Can Carol assing this to an $100,000.00 ILIT Assign this to ILIT can John assign this to an ILIT can John assign this to an ILIT can John assign this to an ILIT

Total Estate after Planning

$4,681,150.00

$4,407,150.00

$274,000.00

$4,681,150.00

Assets - after Planning Residence (645K-244K= 401K equity

FMV

John

Carol

Owner/Beneficiary

Pension - cash value

$259,000.00

$259,000.00

RSU Options

$113,000.00

$113,000.00

$401,000.00 Carol's Rev Trust Carol = Owner/ John should be first beneficiary and then Carol's Rev Trust is $14,000.00 contingent beneficiary John = Owner/ Carol should be the first beneficairy and then John' Rev Trust is the contingent beneficiary can John assign this to his Rev Trust or have a POD option?

$133,000.00

John = Owner/ Carol should be the first beneficairy and then John' Rev Trust is the contingent beneficiary

Roth IRA - Carol

401k

$401,000.00

$14,000.00

$133,000.00

IRA- John

$577,000.00

IRA - Carol

$160,000.00

John = Owner/ Carol should be the first beneficairy and then John' Rev Trust is the contingent beneficiary Carol = Owner/ John should be first beneficiary and then Carol's Rev Trust is $160,000.00 contingent beneficiary

$38,000.00

John = Owner/ Carol should be the first beneficairy and then John' Rev Trust is the contingent beneficiary

Roth IRA - John

$577,000.00

$38,000.00

Investment - broker

$906,000.00

$306,000.00

Savings

$60,000.00

$60,000.00

Checking

$32,000.00

$32,000.00

Checking

$34,000.00

$34,000.00

Checking

$4,150.00

$4,150.00

TIAA-CREFF - Carol Private Life Ins - John

$100,000.00 $300,000.00

$300,000.00

Work Life Ins

$500,000.00

$500,000.00

Work Life Ins

$50,000.00

$50,000.00

$1,000,000.00 $4,681,150.00

$1,000,000.00 $3,406,150.00

Work Travel Life Ins Total Estate after Planning Estate less all Life insurance 4,681,150 - 1,950,000 = 2,731,150 if all insurance can be assigned to ILIT 3,406,150-1,850,000 = 1,556,150

$600,000.00 Split between Rev Trusts John' Rev Trust should be owner or POD beneficiary John is owner. Can you put John' Rev Trust as POD beneficiary. If not, keep 10K or less in this. John is owner. Can you put John' Rev Trust as POD beneficiary. If not, keep 10K or less in this. John is owner. Can you put John' Rev Trust as POD beneficiary. If not, keep 10K or less in this. Can Carol assing this to an $100,000.00 ILIT Assign this to ILIT can John assign this to an ILIT can John assign this to an ILIT can John assign this to an ILIT $4,681,150.00 $1,275,000.00

Developed by Attorney Jacqueline Voss Lees, © No Planning Is return required to be filed Gross Estate at Death

$4,681,150.00

Plus Lifetime Gifts $4,681,150.00 If this is <$1M, then tax on Gross Estate at Death Massachusetts Estate Tax Calculation Total Gross Estate from 1999 rev. 706 p.1, L.3 Deductions part 5, recap. P.3, items 23 Taxable Estate F706 p.1, L.3 Less $60,000 Adjusted Taxable Estate

$4,681,150.00 $0.00 $4,681,150.00 -$60,000.00 $4,621,150.00

Table B Col 1 Min. Table B Col 3 credit amount Amount of excess over Table B col 1 Rate on excess over Table B col 1 Excess as $'s Est. State Death Tax on Death of 2nd spouse

$4,040,000.00 $290,800.00 $581,150.00 11.20% $65,088.80 $355,888.80 See Table B F706 Inst p 12

Lessor tax as between Fed & State comparison

$355,888.80 FALSE

This assumes all assets in estate

FEDERAL ESTATE TAX CALCULATION

Developed by Attorney Jacqueline Voss Lees, © Two Rev Trusts No ILIT Is return required to be filed Gross Estate at Death

$3,681,150.00

Plus Lifetime Gifts $3,681,150.00 If this is <$1M, then tax on Gross Estate at Death Massachusetts Estate Tax Calculation Total Gross Estate from 1999 rev. 706 p.1, L.3 Deductions part 5, recap. P.3, items 23 Taxable Estate F706 p.1, L.3 Less $60,000 Adjusted Taxable Estate

$3,681,150.00 $0.00 $3,681,150.00 -$60,000.00 $3,621,150.00

Table B Col 1 Min. Table B Col 3 credit amount Amount of excess over Table B col 1 Rate on excess over Table B col 1 Excess as $'s Est. State Death Tax on Death of 2nd spouse

$3,540,000.00 $238,800.00 $81,150.00 10.40% $8,439.60 $247,239.60 See Table B F706 Inst p 12

Lessor tax as between Fed & State comparison

$247,239.60 FALSE

This assumes all assets in estate

FEDERAL ESTATE TAX CALCULATION

Developed by Attorney Jacqueline Voss Lees, © Two Rev Trusts $300K ILIT Is return required to be filed Gross Estate at Death

$3,381,150.00

Plus Lifetime Gifts $3,381,150.00 If this is <$1M, then tax on Gross Estate at Death Massachusetts Estate Tax Calculation Total Gross Estate from 1999 rev. 706 p.1, L.3 Deductions part 5, recap. P.3, items 23 Taxable Estate F706 p.1, L.3 Less $60,000 Adjusted Taxable Estate

$3,381,150.00 $0.00 $3,381,150.00 -$60,000.00 $3,321,150.00

Table B Col 1 Min. Table B Col 3 credit amount Amount of excess over Table B col 1 Rate on excess over Table B col 1 Excess as $'s Est. State Death Tax on Death of 2nd spouse

$3,040,000.00 $190,800.00 $281,150.00 10.40% $29,239.60 $220,039.60 See Table B F706 Inst p 12

Lessor tax as between Fed & State comparison

$220,039.60 FALSE

This assumes all assets in estate

FEDERAL ESTATE TAX CALCULATION

Developed by Attorney Jacqueline Voss Lees, © Two Rev Trusts $1,950K ILIT Is return required to be filed Gross Estate at Death

$1,731,150.00

Plus Lifetime Gifts $1,731,150.00 If this is <$1M, then tax on Gross Estate at Death Massachusetts Estate Tax Calculation Total Gross Estate from 1999 rev. 706 p.1, L.3 Deductions part 5, recap. P.3, items 23 Taxable Estate F706 p.1, L.3 Less $60,000 Adjusted Taxable Estate

$1,731,150.00 $0.00 $1,731,150.00 -$60,000.00 $1,671,150.00

Table B Col 1 Min. Table B Col 3 credit amount Amount of excess over Table B col 1 Rate on excess over Table B col 1 Excess as $'s Est. State Death Tax on Death of 2nd spouse

$1,540,000.00 $70,800.00 $131,150.00 7.20% $9,442.80 $80,242.80 See Table B F706 Inst p 12

Lessor tax as between Fed & State comparison

$80,242.80 FALSE

This assumes all life ins in ILIT or that the business travel ins does not pay and all other insurance in ILIT