Question 3 Amanda and Rodger are married out of community of property with the inclusion of...

 

Transcribed Image Text:

Question 3 Amanda and Rodger are married out of community of property with the inclusion of the accrual system. They have two children, Abigail and Isabella, who are both at university, and they thought it would be appropriate to revisit their Last Will and Testament with guidance from their estate analysis. The couple would like to leave all their assets and belongings to their children in equal shares, should they pass away simultaneously. Rodger has asked that you first prepare his estate analysis. He would like to include in his estate a specific cash bequest of R100 000 to each child, and his gold coins in equal shares to Amanda and the two children, which are to be registered in each of their personal names on his death. The remainder of his estate he leaves to his children in equal shares. Their executor charges the maximum fee plus VAT. The couple were married on 2 June 1989. At the time, Rodger's estate was worth R10 000 and Amanda's was worth R50 000. The Consumer Price Index (CPI) headline index number at the date of marriage was 40.0, and at death can be assumed at 124.0. The couple's assets and liabilities: Asset Flat in Strand Flat in Durban Gold coins Unit trust Motor vehicle Motor vehicle Call account Fixed deposit Tax free savings account Paintings Life policy 1 Life policy 2 Life policy 3 Life policy 4 Notes: 1. 2. 3. 4. 5. 6. Market value R1 250 000 3.1 R 850 000 R1 200 000 R 400 000 R 300 000 R 200 000 R 200 000 R 50 000 R 100 000 3.3 R 700 000 R4 000 000 R3 000 000 R 500 000 R 750 000 Base cost R1 000 000 R 600 000 R 750 000 R 100 000 R 350 000 R 280 000 R 200 000 R 50 000 R 80 000 Owner Rodger Amanda Rodger R 50 000 Amanda Rodger Rodger Amanda Amanda Rodger Rodger Calculate the accrual claim. 3.2 Calculate the estate duty payable. Amanda, who is also the life assured. Rodger, who is also the life assured. See Note 6 Amanda. Rodger is the life assured. Notes Bond of R400 000 Bond of R5 000 See Note 1 See Note 2 See Note 3 See Note 4 See Note 5 Nominated beneficiary: Rodger Nominated beneficiaries: 50% to estate 50% to Amanda Rodger would like to request in his Will that these are not sold but bequeathed in equal shares to his wife and children on his death. The unit trust investment is in pure equity funds. The couple estimate their funeral costs to be R50 000 each, and their capital gains tax payable to be R250 000 each. Nominated beneficiaries: 25% to Abigail 25% to Isabella Amanda transferred these funds from her savings account to her call account. This money is intended to cover any emergency expenses the couple might have. Rodger reinvested the funds in a three-month fixed deposit. Amanda inherited the paintings from her grandfather in 1991; these were recently revalued. Rodger took out this policy on the life of his mother. Should she pass away, he will use the policy proceeds to assist his dad in covering his mother's funeral costs. The policy has a cash value of R57 000. Perform the following calculations, assuming that Rodger passes away today. Show all your calculations and reasoning. Conduct a liquidity analysis and comment on the result. Question 3 Amanda and Rodger are married out of community of property with the inclusion of the accrual system. They have two children, Abigail and Isabella, who are both at university, and they thought it would be appropriate to revisit their Last Will and Testament with guidance from their estate analysis. The couple would like to leave all their assets and belongings to their children in equal shares, should they pass away simultaneously. Rodger has asked that you first prepare his estate analysis. He would like to include in his estate a specific cash bequest of R100 000 to each child, and his gold coins in equal shares to Amanda and the two children, which are to be registered in each of their personal names on his death. The remainder of his estate he leaves to his children in equal shares. Their executor charges the maximum fee plus VAT. The couple were married on 2 June 1989. At the time, Rodger's estate was worth R10 000 and Amanda's was worth R50 000. The Consumer Price Index (CPI) headline index number at the date of marriage was 40.0, and at death can be assumed at 124.0. The couple's assets and liabilities: Asset Flat in Strand Flat in Durban Gold coins Unit trust Motor vehicle Motor vehicle Call account Fixed deposit Tax free savings account Paintings Life policy 1 Life policy 2 Life policy 3 Life policy 4 Notes: 1. 2. 3. 4. 5. 6. Market value R1 250 000 3.1 R 850 000 R1 200 000 R 400 000 R 300 000 R 200 000 R 200 000 R 50 000 R 100 000 3.3 R 700 000 R4 000 000 R3 000 000 R 500 000 R 750 000 Base cost R1 000 000 R 600 000 R 750 000 R 100 000 R 350 000 R 280 000 R 200 000 R 50 000 R 80 000 Owner Rodger Amanda Rodger R 50 000 Amanda Rodger Rodger Amanda Amanda Rodger Rodger Calculate the accrual claim. 3.2 Calculate the estate duty payable. Amanda, who is also the life assured. Rodger, who is also the life assured. See Note 6 Amanda. Rodger is the life assured. Notes Bond of R400 000 Bond of R5 000 See Note 1 See Note 2 See Note 3 See Note 4 See Note 5 Nominated beneficiary: Rodger Nominated beneficiaries: 50% to estate 50% to Amanda Rodger would like to request in his Will that these are not sold but bequeathed in equal shares to his wife and children on his death. The unit trust investment is in pure equity funds. The couple estimate their funeral costs to be R50 000 each, and their capital gains tax payable to be R250 000 each. Nominated beneficiaries: 25% to Abigail 25% to Isabella Amanda transferred these funds from her savings account to her call account. This money is intended to cover any emergency expenses the couple might have. Rodger reinvested the funds in a three-month fixed deposit. Amanda inherited the paintings from her grandfather in 1991; these were recently revalued. Rodger took out this policy on the life of his mother. Should she pass away, he will use the policy proceeds to assist his dad in covering his mother's funeral costs. The policy has a cash value of R57 000. Perform the following calculations, assuming that Rodger passes away today. Show all your calculations and reasoning. Conduct a liquidity analysis and comment on the result.

Answer rating: 100% (QA)

31 Calculate the Accrual Claim The accrual claim is calculated by taking the total assets of the estate and subtracting the total liabilities of the estate The accrual claim is then calculated by taki... View the full answer