Using the information provided in questions one and two consider the following additional information.In conjunction with the succession plan that is being made in question 2, Jaime and Alexandra Smith face the difficult question of planning for their demise.Despite Jaime's vast knowledge in the field of Estate planning, he has come to you as the families most trusted advisor to made an estate plan that would express their wishes.Jaime and Alexandra have been incredibly successful and they wish to be fair to all of their children and grandchildren.They also have an affinity for certain charities and wish that charitable giving be a big part of their overall estate plan.The couple has the following joint assets:

Smith

Estate Plan

Personal Financial Statement

12/31/2030

Cash

$350,000

Stocks, Bonds other Securities

3,500,000

Retirement Funds

1,650,000

Florida Home

750,000

New York Home

450,000

Napa Valley Home

825,000

Stock in Closely Held Businesses

Smith Vineyards Inc. 75%

15,000,000

Smith Wine Lands Inc. 100%

7,500,000

Total Assets

$30,025,000

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Liabilities

Mortgage on Napa Home

$600,000

Equity

29,425,000

Total Liabilities and Equity

$30,025,000

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You should note that Jaime intentionally put the vineyard land in separate corporations under the parent Smith Wine lands Inc., in the event that he wanted to sell off a piece of the property to an interested party.Each of the Smith Vineyards Corporations and subsidiaries pays rent to the Smith Wine Lands Corporation as a way to reduce taxes, further insulate the owners from liability and balance out the earnings.None of the corporations pays excessive rent compared to the marketplace.

In addition, Jaime and Alexandra set up a life insurance trust for $5,000,000 with a second to die term life insurance policy.Their 5 children are the beneficiaries of the insurance trust and have executed their crummy notices each year so that the trust is valid and the gifts made were present interests for tax purposes.The trust has a "pour over" provision which allows it to purchase assets from the estate of the last to die to provide liquidity to pay some or all of the estate tax that may be due.Any assets of the trust after this purchase from the estate are to be distributed to their children in equal shares per stirpes.

Further, Jaime and Alexandra have been big proponents of ice sports.They wish to foster the men's club hockey program and the woman's synchronized skating programs at Boston University.They wish to leave a legacy to help future hockey players and synchronized skaters enjoy the riches that a Boston University education provides coupled with maturation that participation in an athletics can afford a young person.As such they wish to provide $5,000,000 to build a new ice hockey arena called the Smith Pavilion on South Campus.

Lastly, the couple wants to provide for their retirement.For being so successful, Jaime and Alexandra live fairly modestly.They anticipate that they need a net of $350,000 per year to pay their bills and maintain their lifestyle.They anticipate a bit more travel between their 3 homes.Presently, Jaime has collected a salary of $200,000 as the CEO and Alexandra has collected a salary of $250,000 as the President and Chief Marketing officer.They have paid their children who are involved in the business well but not above the market rate for the work that they perform.For any of their children or grandchildren not involved in the business they have made gifts of $28,000 per year as allowed by the gift tax laws without having to file a gift tax return.This amount seems to have kept the playing field level and equal.

Please prepare estate tax return form as if Jaime and Alexandra died this tax year.Comment briefly on any planning techniques that Jaime and Alexandra's may wish to employ that would have lowered their overall estate cost while passing their total estate equally to their children.