What are the amounts includible in Bradford Richman's grossestate in each of the following independent...

What are the amounts includible in Bradford Richman's gross estate in each of the following independent cases?

Two years before Brad died, he gave his wife Hilda $10,000 and instructed her to buy $500,000 of term insurance coverage on his life, and she did.
Eleven years before Brad died, he irrevocably transferred the $500,000 policy to an insurance trust, retaining only the power to veto any attempts to borrow against the policy.
Same as (b), but he relinquished the veto power two years before he died.

Expert Solution

a) The gross estate is $500,000 as the entire income is tax- free and thus no deductions on the amount is chargeable.

b) The gross estate is 0 but the beneficiary's gross estate has increased by $500,000 less the estate taxes payable.

c) Gross estate does not take into account any liabilities and therefore, even if there is any borrowing keeping such sum as collateral, it would not affect Bradford Richman's estate and would rather affect the beneficiary's estate.

jeff jeffy answered 2 years ago

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