James and Susan Wagner have assers with fair market of $12,700,000 and $4,800,000, respectively. James has been diagonosed with a terminal illness and is expected to pass away within the current year. James wants to minimize his estate taxes, and any appropriate planning should consider the following factors.

a. James Wagner has debts of $210,000 against the assest in his estate.

b. It is estimated that administrative and funeral expenses will be $25,000 each for James and Susan.

c. Susan wanted to make contributions of $4,000,000 to charity during her remaining life expectancy. It is estimated that Susan would be able to live comforatbaly for the balance of her life.

d. Assume that Susan will live for three years after the year of her husband's death.

e. Is is anticipated that at the time of Susna's death her estate would have appreciated by $150,000 per year for three years.

f. Neither James nor Susan has made any gifts during the current year.

g. The couple has two childern and three grandchildren. Once of the grandchildren is attending the University of Wisconsin and is expected to graduate in two years. Annual tuition costs are $25,000 per year and $50,000 will be paid directly to the university.

h. James has agreed to make a $200,000 charitable contribution to the Sierra Club out of his estate.

i. If any trusts are created, the income from the trust will benefit the surviving spouse, and any corpus will ultimately pass to the children.

Develop an estate plan for the Wagners that would minimize estate taxes and incorporate the above factors. The unified tax rates and exclusion amounts set forth in the text shoud be used. Assume that annual nontaxable gifts up to $14,000 per donor will be made to all children and grandchildren to whatever extent possible.