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 $132,000, and the proceeds are payable to Montgomerys estate. The Walen Trust is an irrevocable trust created by Montgomerys brother 10 years ago and contains assets currently valued at $800,000. The income from the trust is payable to Montgomerys 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. (Refer to Exhibit 25-1, Exhibit 25-2 and Exhibit 25-4.)

Property Auto Personal effects Checking and savings accounts Investments Residence Life insurance proceeds Real estate investments Walen Trust Value $ 26,000 81,000 262,000 2,530,000 1,430,000 1,030,000 10,155,000 800,000 Adjusted Basis $ 61,000 116,000 262,000 800,000 1,010,000 62,000 2,830,000 80,000 Property Auto Personal effects Checking and savings accounts Investments Residence Life insurance proceeds Real estate investments Walen Trust Value $ 26,000 81,000 262,000 2,530,000 1,430,000 1,030,000 10,155,000 800,000 Adjusted Basis $ 61,000 116,000 262,000 800,000 1,010,000 62,000 2,830,000 80,000