Edith Leppert and her husband, Gerald Leppert, have net assets with market values of $4,300,000 and $2,400,000, respectively. The Lepperts have begun to do some estate tax planning and are developing various strategies based on the following assumptions:
a. Due to preexisting health conditions, it is assumed that Edith will precede her husband in death and Gerald will survive Edith by three years.
b. Gerald’s net assets, including those assets received upon Edith’s death, are expected to appreciate at an annual compound rate of 5% per year.
c. Administrative and funeral expenses are estimated to be $25,000 per person.
d. Both Edith and Gerald have each earmarked $150,000 of their net assets to be donated to charitable organizations.
Based on the above information, determine the amount of estate tax that both Edith and Gerald Leppert would be exposed to given:
(1) That no trusts were established and
(2) That a credit shelter trust is created by each person for the benefit of their children in the amount of $3,500,000. Unified transfer tax rates and the unified credit as set forth in the text should be used.

  • CreatedApril 13, 2015
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