Ms. JL is a successful attorney in the 39.6 percent marginal tax bracket. During the past several years, she provided legal services to her great uncle, who is 78 years old and in failing health. Although the uncle offered to pay for her work, she re-fused any compensation, requesting instead that her uncle remember her appropriately in his will. The uncle recently added a codicil providing for a $250,000 cash bequest to Ms. JL. The remainder of his estate will pass to his two children and seven grandchildren.
a. What tax planning objective may Ms. JL have accomplished through her request of her uncle?
b. Can you identify both the opportunity cost and the risk inherent in her plan?