Question

Cody and Reese were married years ago and had one child, Amber. Cody and his longtime friend, Kandi, were recently flying in Kandi’s new plane. For a brief period Kandi was distracted and lost control of the plane. Unfortunately, the plane crashed and Kandi died instantly and Cody died a few days later as a result of the injuries sustained during the crash. When Cody died he and Reese owned the following property: Home valued at $1,000,000 held tenancy by the entirety. Car 1 valued at $15,000 held fee simple by Cody. Car 2 valued at $20,000 held Joint Tenancy with Rights of Survivorship by Cody and Amber. Inherited diamond ring collection valued at $3,000,000 held fee simple by Reese. Boat valued at $500,000 held tenancy in common by Cody and Amber. Life Insurance Policy 1 on Reese’s life, owned by Cody. The fair market value of the policy was $100,000 and the death benefit was $200,000. The beneficiary is Amber. Life Insurance Policy 2 on Cody’s life, owned by Cody. The fair market value of the policy was $80,000 and the death benefit was $600,000. The only beneficiary is Kandi. IRA account valued at $2,500,000 owned by Cody with Amber as the beneficiary. Irrevocable Trust by Cody for the benefit of Amber created five years ago. The trust is valued at $400,000, and Amber is the beneficiary at Cody’s death. Questions: Assuming Cody and Reese have lived in California, a community property state, for all their married working lives. Which of their assets are community property? home life insurance policy on Reese (Cody beneficiary) Cody’s IRA (Reese is beneficiary) $100,000 in a CD owned by Reese Car owned by Cody only All of the above I, II, III, V I, III, V I, V I Which of the assets are subject to probate if Cody dies? All of the above I, IV, V IV, V V

Answer 1

SOLUTION:

JTWROS or joint inhabitant with privileges of survivorship is a sort of understanding went into by at least two people where the co-proprietors have measure up to right in possession, regardless of the sum contributed by every part.

It additionally states tjat if there should be an occurrence of death of any of the part, the property will be claimed by the surviving part (s).

As Cody died few days after the death of Kandi, hence Cody was the only owner of the vacation home.

For the JTWROS IRS will include the total value of vacation home i.e. $100,000 as Cody's gross EST.