| == Question One: ==
You are expanding on your estate analysis for Ming An and Elsie Lee {{{Last Name}}}, who are beginning to get concerned about the value of estate they will have to pass on.
They have told you that they would like to plan for burial costs of {{{burial cost}}} and probate and other fees at a rate of {{{probate and other fees}}}. They each have a will and power of attorney for property. Their will was re-drafted last on January 1st, eight years ago.
Ming An would like to give {{{Amount to charity}}} to {{{charity}}}, a registered charity, followed by 100,000 to each of 5 kids to his children. The residual beneficiary for Ming An’s estate is Elsie Lee. {{{Female name}}} wants to give $240,000 of her estate to Ming An, and then 5% to her sister. The residual beneficiaries for Elsie Lee’s estate are her children.
- What is the total distribution to Elsie Lee if Ming An dies first?
- What is the total distribution to their children if Elsie Lee dies first?
Answer:
Change the drop-down menu option under Client Data Entry to Integrated Planning. Use the navigation panel to go directly to the Will Information screen. Starting under the Planning Assumptions section:
1. Enter $10,000 in the field Assumed Burial Costs
2. Set the rate for Probate and Other Fees to 4%
3. For {{{Country}}}, set the Marginal Tax Rate on Estate for both clients to {{{marginal tax rate}}}. For all other countries, set the Marginal Tax Rate on Estate to 0%.
4. Ming An indicated he had a power of attorney for property and a will, so click the checkboxes beside Have a Will and Have a Power of Attorney for Property.
5. The will was effective eight (8) years ago, Jan 1st, so under Effective From for Have a Will enter 20XX-01-01 as appropriate.
6. Repeat these steps for Alice as well.
We will now proceed to enter the data for the Partial Distribution and Residual Distribution sections.
7. For Ming An’s first partial distribution, enter 0 in the Percent field, leaving the Dollar Amount field blank. Change the Beneficiary to Charitable Donation.
8. For Ming An’s second partial distribution, enter 100,000 to each of 5 kids in the Dollar Amount field, leaving the Percent blank. Change the Beneficiary setting to Child.
9. For Elsie Lee’s distribution to Ming An, change the first Dollar Amount field to $240,000. Change the drop-down menu for the Beneficiary to Spouse.
10. For Elsie Lee’s second partial distribution, enter 5% in the Dollar Amount field, leaving the Percent field blank. Change the Beneficiary to Other since there is no specific setting for sister.
11. The Residual Distribution setting for Ming An can be left at Spouse, however, for Elsie Lee, it should be changed to Child.
12. Click Save
To View the Estate Analysis Report:
Click the Preview button at the bottom of the screen, OR
1. In the Your Working Documents screen, click on Preparing Reports – Risk Management.
2. Click on the Radio button beside Estate Analysis.
3. Click on the Generate Document link. It will take approximately one minute to generate. Hit the Refresh button periodically until the completed document is ready.
4. Finally, when the document has completed calculating and is ready to view, click the Download button.
The report is broken down into four sections for two different scenarios – one for the event that Walter dies first, and another for the event that Elsie Lee dies first. And for each scenario, the analysis is done on first and second death.
To identify the total distribution to Elsie Lee if Ming An dies first, scroll down to the last line called Total Distribution in the scenario that “Ming An Dies First”. Follow the line until it meets the column titled Elsie Lee or Spouse and record the number.
To identify the total distribution to their children if Alice dies first, scroll down to the last line called Total Distribution in the scenario for “Elsie Lee Dies First” AND “Ming An Dies Second”. Follow the line until it meets the column titled Children. Add the two values and record the sum.
|