Jane Russell, CFA, is meeting with a client who has asked her about protecting his assets...

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Jane Russell, CFA, is meeting with a client who has asked her about protecting his assets from his wife. The couple has been separated but divorce is not an option. The client wants all of his assets to go to his children and is considering making gifts to the children to avoid marital and forced heirship rules. The couple has marital assets of GBP 25M. Total estate assets are estimated at GBP 35M reflecting GBP 7M owned personally by the husband and 3M by the wife. Community property rules specify either spouse is entitled to 40% of the marital assets, and forced heirship rules specify entitlement to 30% of the total estate. A. If the client gifts his GBP 7M of personal assets to his children now and leaves his wife GBP 10M in his will, determine and justify whether the wife would have a claim under claw-back provisions. Jane Russell, CFA, is meeting with a client who has asked her about protecting his assets from his wife. The couple has been separated but divorce is not an option. The client wants all of his assets to go to his children and is considering making gifts to the children to avoid marital and forced heirship rules. The couple has marital assets of GBP 25M. Total estate assets are estimated at GBP 35M reflecting GBP 7M owned personally by the husband and 3M by the wife. Community property rules specify either spouse is entitled to 40% of the marital assets, and forced heirship rules specify entitlement to 30% of the total estate. A. If the client gifts his GBP 7M of personal assets to his children now and leaves his wife GBP 10M in his will, determine and justify whether the wife would have a claim under claw-back provisions.

Answer rating: 100% (QA)

In the context of estate planning clawback provisions are mechanisms designed to prevent the reducti... View the full answer