Question

Suzanne and Steve have $2,200,000 of assets in 2018: $600,000 in Steve’s name, $600,000 in Suzanne’s, and $1,000,000 of jointly owned property. Their joint property is titled using joint tenancy with right of survivorship. Suzanne also co-owns a $400,000 beach house with her sister Emily as tenants in common. Calculations: 1. What is the maximum of 2018 estate value transferred by the Smiths at death free? 2. What do the Smiths need to do to reduce their expected tax liability? 3. Who would receive Suzanne’s half-share in the beach house is she were to die?

Answer 1

Solution:-

1. What is the maximum of 2018 estate value transferred by the Smiths at death free:-

The Smiths could jointly transfer a total of $22,800,000 before incurring federal estate tax in 2018.

2. What do the Smiths need to do to reduce their expected tax liability:-

The Smiths should re-title their ownership of the property and put it in a trust to take advantage of taxes. In this way they can take advantage of a standard family trust and gift giving.

3. Who would receive Suzanne’s half-share in the beach house is she were to die:-

Suzanne’s half share of the beach house would go to whoever she names in her will. If she dies in testate, state law will determine how her share in the beach house is transferred.

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