Question
Your client, age 65, has a gross estate valued at $15.2 million. He and his second wife have two teenage children. In addition, your client
Your client, age 65, has a gross estate valued at $15.2 million. He and his second wife have two teenage children. In addition, your client has two children from his first marriage who are in their mid-30s.
His objectives are:
- to leave an income stream and a portion of his estate to his current wife;
- to leave a portion of his estate in trust for the teenage children from his current marriage;
- to ensure that the children from his first marriage receive a portion of his estate; and
- to reduce his federal estate tax liability.
Which one of the following transfers is most appropriate for achieving the client's objectives?
A)
combination A-B-C (power of appointment, family bypass, and QTIP) trust arrangement
B)
outright transfer of the entire estate into a power of appointment trust
C)
outright gift of two-thirds of the estate to his current wife, with the remainder passing to the teenage children in a nonmarital trust
D)
family bypass trust equal to the applicable exclusion amount for the teenage children, with the remainder in a marital trust for his current wife
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