Case Details

• Jack and Diane are both 65 years old and are married US citizens

• Jack has assets of $12,000,000 and Diane has assets of $3,000,000 for a total combined net worth of $15,000,000

• Jack dies in 2020 (age 65) and Diane dies in 2050 (age 95)

• Neither has ever made any taxable gifts, neither is planning to give anything to charity, and Diane will not remarry

• Assume all assets increase in value by 5% per year (Diane lives off the excess after Jack passes)

• No change to estate taxes or lifetime exemption

Two scenarios to consider:

A. Jack leaves everything to Diane and makes full use of Marital deduction. Diane elects DSUE (deceased spouses unused exclusion)

B. Jack's will creates a credit shelter trust at his death and directs that $11,580,000 of his assets goes into the trust with the remaining estate given directly to Diane

Calculate the following for both scenarios A and B:

1. Diane's gross estate in 2050

2. Diane's taxable estate in 2050

3. The estate tax due in 2050