BB-2 Kaity Williams – Estate Planning-Probate-Wills & Trusts – 10pts

Due Saturday 10/30/2021 by 8:00pm

A client walks into your supervising attorney's office. His name is Mr. Barry Rich. In the initial
interview he tells you that he works as a commercial real estate developer. He is concerned
about being sued since his occupation is one of high risk and he has assets of approximately
5.5 million dollars.

Mr. Barry Rich is married to a woman who is a citizen of Japan. He is 55 years old and has
three children and one grandchild. His assets consist of a house worth $500,000, oil and gas
royalty rights in Oklahoma worth 1.3 million dollars, stocks and bonds worth 2 million dollars
with a tax basis of $50,000, and 2 million dollars cash value in various life insurance policies.

1. Please discuss what steps you believe Mr. Rich should take to avoid federal and state
estate taxes and to provide some protection from lawsuits.

First off, I would see if Mr. Barry Rich has a will. If not, I would help him set up a
carefully drawn will that will minimize death taxes, has fiduciary and tax provisions and
that addresses the care of his wife and children upon his death.

Then I would help him put his assets in an Estate Tax Trust or a QTIP Trust and or a
Revocable Living Trust where he retains the power to amend or revoke the document
at any time. But also, I might consider a Dynasty Trust or an Irrevocable Trust to
shelter assets from transfer taxes and, at the same time, it allows generations of family
members to receive income from those sheltered assets. And post mortem planning
would be helpful as well.

2. What additional information should you know to help Mr. Rich achieve his objectives?

I would need to know a lot of things in order to customize his will and trust in
accordance with his wishes. But in general, I would need to know what state he is
domiciled in and when he planned on retiring and in what capacity does he work as a
commercial real estate developer? Does he own the company or is he an employee?
What kind of life insurance policies does he have and are his children named as
beneficiaries on them? How old are his children and whether he has liability insurance
for his employment as a real estate developer in the case that he was sued? I would
need to know who his beneficiaries are and whether they are named on any of the
assets like the stocks and bond or insurance policies. I would need to know who the
beneficiaries are and how he wants his assets distributed. Even though his wife is a
citizen of Japan they wouldn’t have to pay the federal gift and estate tax because their
assets are only $5.5million and $11.7 million is what is potentially subject to the tax.
But I would also need to know if any of the assets are in both of their names or if his
wife has a percentage of any of the assets. I would try and ask him as many questions I
needed to in order to determine his exact situation and what he needed as an outcome
in order to be fully protected.