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2nd Death Occurs

2nd Death Occurs. CURRENT ESTATE PLAN. ESTATE. Heirs Outright $4,072,538. Estate Tax $2,864,212 (plus $63,250 in settlement charges. Charitable Organizations $-0-. ESTATE TAX CALCULATION. ESTATE………………………….$6,325,000. COSTS……………………………...($63,250).

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2nd Death Occurs

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  1. 2nd Death Occurs CURRENT ESTATE PLAN... ESTATE Heirs Outright $4,072,538 Estate Tax $2,864,212 (plus $63,250 in settlement charges Charitable Organizations $-0-

  2. ESTATE TAX CALCULATION... ESTATE………………………….$6,325,000 COSTS……………………………...($63,250) NET TAXABLE ESTATE………$6,261,750 TENTATIVE TAX……………….$3,084,762

  3. UNIFIED CREDIT………………….$220,550 ESTATE TAX……………………..$2,864,212 NET TO FAMILY………………...$3,397,538 FIRST DECEASED’S ESTATE + $675,000 Outright $4,072,538 to heirs

  4. 2nd Death Occurs PROPOSED ESTATE PLAN... RICH’S ESTATE Lead Trust $2,600,000 Remainder Trust $2,600,000 Estate Tax $1,036,265 + $63,250 Heirs Outright $700,485

  5. Lead Trust $2,600,000 Remainder Trust $2,600,000 10% 6.25% Income Income each each year year (Charity) (Heirs) 15 Years Pass (Charity) (Heirs)

  6. A LOOK AT THE APPROXIMATE DEDUCTIONS… USED TO LOWER THE RICH’S ESTATE VALUE (assumed AFR of 8.0%)

  7. A LOOK AT THE APPROXIMATE DEDUCTIONS... ESTATE VALUE…………………………….$6,325,000 • 1% for settlement charges…………………..($63,250) • $6,261,750 • *Charitable estate deduction • for a 15-year, 6.25% payout • CRT funded with $2,600,000……………...($1,034,751) • * Charitable estate deduction • for a 15-year, 10% CLAT • funded with $2,600,000…………………...($2,291,121) • TAXABLE ESTATE…….……..…$2,935,878

  8. Tentative Tax……………………...…………..$1,256,815 • Unified Credit…..………….……………………$220,550 Estate Tax due………………$1,036,265 * NOTE:Deductions available at the time this case illustration was created

  9. NET EFFECT OF CURRENT ESTATE PLAN versus TANDEM TRUST ESTATE PLAN CURRENT ESTATE PLAN VS TANDEM PLAN NET - PRESENT VALUE ASSUMING 3.5% DISCOUNT

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