Case 2: Belinda Johnson Helps Her Uncle Plan His Estate

Belinda Johnson has been approached by her uncle, David Lawrence, who seeks advice about planning his estate. She has been handling some of David's investments, and he trusts her judgment on financial matters. David has a net worth of $2,340,000. At age 54, he is concerned about preparing his finances so that as much as possible of his estate will go to his heirs according to his wishes. David has no will but has written down some of his ideas. He has no wife or children but wants to provide for his mother, four nephews, Belinda, and a disabled sister.

Directions: Fill in the fields below to submit your solution to this case.

1. What is the first action David should take in planning his estate? Why?


2. How might David use gifts to help reduce his estate taxes?


3. Why might a revocable living trust be a good idea for David in providing for his mother and sister?


4. What other types of trusts might David use in his estate planning?


   

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