The Gross Estate Interactions
Karen owns
an apartment building in Boulder, CO. The apartments are old and need
a lot of repairs. Since she does not want to invest a lot of money into
fixing up the units, she rents them out to low income tenants, as part
of the Section 8 program. During the time Karen has owned the property,
the vacant land near her property has sold for millions of dollars. In
fact, there is a local developer who wants to buy her building and replace
it with a shopping center. Currently, the building is worth $250,000.
If it were a shopping center, it would be valued at $2,250,000. Karen
recently died unexpectedly; her will left the apartment building to her
son, Kenny. He never liked the idea of being a landlord, so he sold the
building to the developer and pocketed $2,000,000.
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At the time
of Luther’s death on June 10, 2003, he owned 1,000 shares of a dividend
paying stock. The next dividend payment date is July 1, 2003, for owners
of record as of June 1, 2003. Luther’s estate is entitled to the
July 1 dividend.
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Leroy owned
several certificates of deposit (CDs) at Bank One when he died in February
2003. The maturity dates were staggered as follows: (1) $5,000 matured
on June 1, 2003; (2) $10,000 matured on October 1, 2003; and (3) $5,000
matured on January 1, 2004. His will left the accounts to his sister,
Eloise. She took possession of the money on November 1, 2003, closed the
accounts and transferred the money to her account at Citibank. Bank One’s
CD contract states that all interest is forfeited if the account is closed
before its maturity. Also, the CDs were not automatically rolled over.
Instead, the owner had to affirmatively notify the bank that he or she
wanted to roll over the money. Rather, the money is transferred to the
person’s non-interest bearing checking account.
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Collette owned
two insurance policies, one had a face amount of $10,000; the other had
a face amount of $20,000. Initially, the beneficiary on both policies
was her late husband, Jodi. She never updated the beneficiary designation
on the first policy after he died. Since the second policy was through
her job, she added her sister, Rachel, as the new beneficiary. Collette
died two weeks ago and is survived by her sister, Rachel.
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Ten years ago,
Burton and his wife, Toni, bought a home in Vermont, near a ski resort.
The home cost $320,000. The house was recently appraised for $620,000.
During the winter, Burton, Toni and their two daughters spent a lot of
time on the ski slopes near their home. Over the President’s Day
holiday of 2003, Toni was killed in a skiing accident.
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Ten years ago,
Burton and his wife, Toni, bought a home in Vermont, near a ski resort.
The home cost $320,000. During the winter, Burton, Toni and their two
daughters spent a lot of time on the ski slopes near their home. Over
the President’s Day holiday of 2003, Toni was killed in a skiing
accident. Due to the grief over his wife’s untimely death, he no
longer wanted to live in the home. Accordingly, he sold the home for $600,000
and moved with his kids to Maine.
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Over a 35-year
career, Dean became very wealthy from establishing several businesses
in New Hampshire. His wife, Judy, was a successful orthodontist. Since
they had two young children at the time, they both purchased life insurance
policies on themselves, naming the other as the beneficiary. Now that
the children are grown, Dean transferred ownership in his policy to his
business partner, Edward. Two years after that transfer, Dean died in
a plane crash. The proceeds of the policy will be included in Dean’s
estate.
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