In 2008 Ann and George established a living trust. Ann and George have 2 children Eva and Greg (ages 19 and 21) from the current marriage and Ann has a child Maria (age 33) from a prior marriage. The trust provided for Survivor, Bypass and QTIP trusts upon the first spouse’s death. They did not make any gifts in excess of the IRC Section 2503 amounts.
When Ann died in 2011 the couple held the following property in their trust:
Ann’s SP $2,600,000 (various stock held in a Charles Schwab account)
CP $11,000,000 ($3,500,000 residence, $3,000,000 rental duplex and the rest is in stock/bonds held in a Fidelity account)
George’s SP $400,000
a. What is the value of Ann’s estate? Is there any estate tax payable?
b. Show allocation of assets into Survivor’s trust, Bypass trust and QTIP trust.
c. What are the possible qualities and possible terms of the Survivor’s trust, of the Bypass trust and of the QTIP trust?
d. What is George’s taxable estate and estate tax if he dies in 2015 and the value of the Survivor trust is $6,300,000, the value of the Bypass trust is $7,000,000 and the value of the QTIP is $3,400,000?