Montgomery has decided to engage in wealth planning and has listed the value of his assets below. The life insurance has a cash surrender value of $120,000 and the proceeds are payable to Montgomery’s estate. The trust is an irrevocable trust created by Montgomery’s brother 10 years ago and contains assets currently valued at $800,000. The income from the trust is payable to Montgomery’s faithful butler, Walen, for his life, and the remainder is payable to Montgomery or his estate. Walen is currently 37 years old and the §7520 interest rate is currently 5.4 percent. Montgomery is unmarried and plans to leave all his assets to his surviving relatives.

a. Calculate the amount of the estate tax due (if any), assuming Montgomery dies this year and has never made any taxable gifts.

b. Calculate the amount of the estate tax due (if any), assuming Montgomery dies this year and made one taxable gift in 2006. The taxable gift was $1 million, and Montgomery used his unified credit to avoid paying any gift tax.

c. Calculate the amount of the estate tax due (if any), assuming Montgomery dies this year and made one taxable gift in 2006. The taxable gift was $1 million, and Montgomery used his unified credit to avoid paying any gift tax. Montgomery plans to bequeath his investments to charity and leave his remaining assets to his surviving relatives.

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Property Value $ 20,000 75,000 250,000 2,500,000 1,400,000 1,000,000 5,125,000 800,000 Adjusted Basis Auto Personal effects Checking and savings account:s Investments Residence Life insur ance proceeds Real estate investments Trust $ 55,000 110,000 250,000 770,000 980,000 50,000 2,800,000 80,000