The assignment below will assess your knowledge and understanding of
testamentary gifts, and your ability to correctly apply the abatement
process.
Directions
Read the scenario below carefully, and then research the tax issues
using CCH Intelliconnect. Answer the following questions in 1-2
double-spaced pages:
- Which disposition category does each gift belong in (Specific
devise, Specific legacy, Residuary legacy, General legacy, or
Demonstrative legacy)? - After his death, Emmett’s expenses, debts, and taxes amount to
$50,000 and none of his assets pass outside his will as intestate
property. Explain how Emmett’s testamentary gifts are used to pay his
obligations according to the abatement process. - If William dies before Emmett and no successor beneficiary is named
to receive the Toyota before Emmett dies, what happens to this gift and
how does it abate? - If the law in Emmett’s domiciliary state “abates” a decedent’s
property within each disposition category and uses the property for
payment of debts on a prorated basis, how much, if any, of the specific
legacies does each beneficiary get to keep after the $50,000 obligation
is paid? See Matter of Estate of Wales, 223 Mont. 515, 727 P.2d 536 (1986)
Your assignment should be submitted in a Microsoft Word document and
be properly formatted in APA, with a title page and reference list
(these do not count towards the page requirement).
Scenario: Saul Rodriguez, a bachelor, makes the following testamentary gifts:
- a house valued at $120,000 to his best friend, Amy Thomas
- furniture and household appliances worth $9,000 to Amy
- a television and stereo system worth $3,000 to his nephew, Noah Rodriguez
- a Toyota Camry worth $20,000 to his only brother, John Rodriguez
- a gift of $12,000 to his sister-in-law, Nancy Rodriguez, to be paid
out of his savings account in Metro State Bank in his hometown - a gift of $6,000 to his church
- and a residue gift of his remaining property, which is all personal property worth $24,000, to the United Way.
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