Danielle Nguyen (age 65) and Andrew Jones (age 65) were recently married in June of last year. They are residents of Portland, Oregon. This is a second marriage for both. Danielle and Andrew own a home together as joint tenants with a right of survivorship. They purchased this house two years ago for $800,000. They each contributed $100,000 to the purchase price ($200,000 total) and are joint and severally liable on the mortgage. Danielle was married for 15 years to Tommy Trinh and has one daughter Samantha (age 40). Danielle and Tommy have been divorced for 30 years. Danielle has her wedding rings from her marriage to Tommy. They are worth $55,000. She would like them to go to Samantha. She leaves them locked up in the bank safety deposit box. Samantha is married to Peter (age 39) and has two children of her own, Andre (age 16) and Pierre (age 14). Andre has a chronic medical condition that allows him to lead a fairly normal life but that occasionally will flare up at which point his medical expenses can be significant. There is no cure for this condition, so he is expected to need to manage it for the rest of his life. Andrew was married to Suzy Jones until her death in 2012. Andrew and Suzy had three children: Julie (age 35), James (age 32), and Jordan. Their youngest son, Jordan, was married in 2012 to Alexa (age 27) and had a daughter with her, Mimi, in 2014. Jordan was killed in a single-car accident in 2016. Mimi is now 7 years old and very bright. Mimi is a math prodigy and will be enrolling in the local university next fall. Andrew has a close relationship with Alexa and still views her as his daughter. In 2019, Andrew established an irrevocable trust that will pay income to Alexa during her lifetime and the remainder to Mimi or Mimi's estate. Alexa also has the ability.te withdraw $15,000 each year during the month of June. The current value of the trust assets is $250,000. During her life, Suzy made $120,000 of taxable gifts. As part of her estate administration, Andrew's CPA elected to "port" Suzy's remaining base exclusion amount of $5 million to Andrew. Suzy's share of the marital assets, which are reflected in the attached financial statement is entirely held in a QTIP trust that distributes all of its income to Andrew on a quarterly basis. At Andrew's death, the remainder of interest in the trust is to pass to Andrew and Suzy's three children in equal shares with a share by right of representation for any child who predeceases Andrew but leaves children of their own. The trust grants a power of appointment to the remainder beneficiaries, which they may exercise in favor of the lineal descendants of Suzy and Andrew. Andrew is a cardiothoracic surgeon who works as an employee of a large hospital system. He earns $550,000 per year in salary. Andrew likes to ski and owns a five-bedroom home at Government Camp, Oregon. He paid $1.8 million cash for it back in 1995 and it recently appraised for insurance purposes at $2.9 million. He would like for his children with Suzy to inherit this house as it was their family retreat while they were growing up. Andrew also has an extensive stock portfolio in addition to the trust from Suzy. Andrew currently owns a life insurance policy that will pay $2 million when he dies. Andrew's estate is the current beneficiary of this policy, and its cash surrender value is $500,000. He's paid six years of premiums so far on the policy of $60,000 per year. Andrew believes that he will die before Danielle and would like his estate plan to provide for her support after his death. Danielle serves as the Chief Operations Officer for her parents' business, Panda Enterprises, Inc. ("Panda"). She has her own stock portfolio and earns a salary of $300,000 per year. Danielle loves going to Hawaii and purchased a condo in Honolulu five years ago for $400,000 on which she currently has a mortgage balance (debt) of $200,000. Samantha doesn't like Hawaii, but Danielle knows that her grandsons would like to have the condo after she dies. Danielle wants to make sure that she has the ability to live in it until she dies. Danielle's mother purchased an annuity for her that pays Danielle $100,000 per year and will pay $100,000 per year to Danielle's children for 15 years after her death. Danielle does not have any life insurance, currently. Danielle is also very involved with the Oregon Humane Society and sits on its board of directors. She would like her estate plan to take into account her support for this organization. Danielle's father, Binh Nguyen, currently owns 100% of the common stock of Panda (FMV $10 million) and serves as the Chief Executive Officer. Panda is a profitable company and Binh. currently takes dividend distributions of $800,000 per year. Corporate recruiters recognize that a lot of Panda's success is because of Danielle's good work and so have been trying to recruit her to work for rival companies. Danielle would like to stay with Panda but is frustrated that she earns so much less than her peers and, honestly, her husband. Binh doesn't want to lose Danielle to a competitor and wants his daughter to be happy. He has proposed restructuring Panda to exchange his Panda shares for 800 shares of voting preferred stock (annual cumulative dividend of $1,000 and a put right to require the company to buy back at $100,000 per share) and 200 shares of nonvoting common stock. He would then transfer the 200 shares of common stock to Danielle. Binh likes this plan because he will continue to receive his dividend payments (he likes to go to Macao and gamble twice a year), but also that will allow Danielle to own shares in Panda that would capture most of the appreciation in the company. He doesn't want any outsiders, including Andrew, to ever own shares of the company because he believes that only his superior genetics will allow the company to prosper. Therefore, as part of the reorganization, he wants language added to the shareholder agreement that will prevent anyone other than his lineal descendants from owning shares in Panda. Our colleagues in the valuation side of the firm have advised us that this would basically translate to a 75% discount for lack of marketability. Samantha is Danielle's only child and Binb's only grandchild. She has an MBA and her CPA and heads up the finance department for Panda. She plans to learn as much as possible about Panda's operations with the goal of eventually becoming CEO of Panda. Joint Deposit Accounts Balance $ Joint Checking Account: Joint Savings Account: $ Andrew's Portfolio Cash Stock A Stock B Stock C Stock D Stock E Stock F Stock G Stock H Danielle's Portfolio Cash Stock I Stock J Stock K $ $ $ $ Suzy QTIP Trust Portfolio Cash Stock A Stock B Stock C Stock D $ $ 60,000.00 180,000.00 Basis 190,000.00 500,000.00 750,000.00 125,000.00 500,000.00 500,000.00 800,000.00 400,000.00 50,000.00 $ $ 3,815,000.00 $ 200,000.00 $ 400,000.00 1,000,000.00 $ 650,000.00 $ $ 2,250,000.00 $ 100,000.00 $ 500,000.00 750,000.00 $ $ 125,000.00 $ 500,000.00 $ 1,975,000.00 FMV 190,000.00 $ 800,000.00 $ 550,000.00 250,000.00 600,000.00 $ $ 600,000.00 $ 1,200,000.00 $ 475,000.00 $ 3,000,000.00 $ 7,665,000.00 $ 200,000.00 $ 600,000.00 800,000.00 $ 1,350,000.00 $ 2,950,000.00 $ 100,000.00 $ 800,000.00 $ 550,000.00 $ 250,000.00 $ 600,000.00 $ 2,300,000.00 Based on the notes, provided financials, and your understanding of the course subject matter: 1. Keeping in mind that there are likely more issues you'll need to address in the individual portion of the final, please list the top 5 most significant estate tax issues that your group has identified that we should address in our discussions with Ms. Nguyen and Mr. Jones. Please explain why they are important. Is there other information that we need? (5 points)