Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1 . CJay Pritchett Jay is age 6 5 . He has been retired for five years. A few years ago, he turned his closet

1. CJay Pritchett
Jay is age 65. He has been retired for five years. A few years ago, he turned his closet fixtures
business over to his younger brother, Donnie. Jay has a prior marriage and two adult children
from the prior marriage, Mitchell Pritchett (37), and Claire Pritchett Dunphy (40). Both have
their own families. Gloria is his second wife. Due to his divorce experience, he entered into a
prenuptial agreement with Gloria prior to their marriage.
Gloria Pritchett
Gloria is age 42. Gloria has had one prior marriage. She has one child by that marriage (her
son Manny age 14). She only has limited assets due to raising Manny on her own with minimal
income. Recently, Gloria gave birth to Joseph, the only child of this marriage to Jay. Because
of Manny's health, Gloria has made out a simple will with 50% of her assets to Manny (in a
testamentary trust) and to 50% to her other child, Joseph. Gloria is a Columbian native, and it
is unclear whether she has completed the process to become a U.S. citizen.
Jay and Gloria
Jay and Gloria currently live in a community property state. They completed a prenuptial
agreement before they got married five years ago. After they got married, Jay did a revocable
trust with QTIP trust provisions. He wants Gloria to be able to use certain assets (especially
the house) if she survives him. He is revisiting his estate plan as he has decided he wants all
his assets to be divided between Gloria, and his four children (he includes Manny).
Prenuptial-Jay
All assets owned by Jay (shown on the financial statement) would currently go to his children
from his first marriage. His estate plan has not been revised since just after his marriage to
Gloria. Assets shown in joint name (new) will go by joint tenancy to Gloria. If Gloria survives
Jay, certain assets go into the QTIP trust.
Gloria. After 10 years, the remaining trust principal will be paid out to his children
equally.
The remaining assets will be placed in a QTIP trust for Gloria's benefit for as long as
she may live. At her death, the trust principal will be paid out to his children equally
(currently, this only names Mitchell and Claire).
Jay's Brother
Donnie is age 60. Since Jay retired five years ago, Donnie has run down the business. Five
years ago, the business generated $200,000 of income for both Jay and Alan. Now Donnie is
barely taking $100,000 from the business, and Jay takes nothing. Donnie just can't handle the
business alone. Jay has a third party who is interested in buying the business from the
partnership and the warehouse from Jay. Jay would like to get what he can from these assets
while he can. The warehouse property is in another nearby state (common law).
Jay's Children (first marriage)
Claire (stay-at-home mom, failed City Council candidate), age 40, married to Phil Dunphy
(moderately successful realtor) and has 3 children (Haley (19), Alex (15), and Luke (13))
Mitchell (environmental attorney), age 37, lives with his partner Cameron Tucker (music
teacher and part-time clown), and has an adopted daughter (Lily (5))
Gloria's Child (first marriage)
Manny (14). As of this writing, Jay has not legally adopted Manny, although it has been
discussed. Unfortunately, Manny was recently diagnosed with a degenerative disease. ?1 This
diagnosis will prevent Manny from living independently as he ages.alculate the total of the assets that will pass through Jays Probate Estate if he dies first.Jay Pritchett
Jay is age 65. He has been retired for five years. A few years ago, he turned his closet fixtures
business over to his younger brother, Donnie. Jay has a prior marriage and two adult children
from the prior marriage, Mitchell Pritchett (37), and Claire Pritchett Dunphy (40). Both have
their own families. Gloria is his second wife. Due to his divorce experience, he entered into a
prenuptial agreement with Gloria prior to their marriage.
Gloria Pritchett
Gloria is age 42. Gloria has had one prior marriage. She has one child by that marriage (her
son Manny age 14). She only has limited assets due to raising Manny on her own with minimal
income. Recently, Gloria gave birth to Joseph, the only child of this marriage
2. Calculate the total of the assets that will be included in Jays Gross Estate if he dies first.
3. Based on Jay and Glorias financial information and family status, provide your recommendations that will accommodate their specific estate plan goals. Provide your rationale and the economic benefits of your recommended estate planning vehicles.
Take into consideration the cost of implementing the estate planning vehicles. Your analysis should also include a review of the familys assets and expenses, and how your estate planning recommendations will impact their current budget and expenses. Do not forget that either spouse may predecease the other.
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The ASQ Auditing Handbook

Authors: J. P. Russell

3rd Edition

0873896661, 978-0873896665

More Books

Students also viewed these Accounting questions