Prepare Your Estate Plan Case Study 5

Case Study 5 - How much will each heir inherit?

Description

George, a 98 year-old widower, has two children, Alice and Bob. Alice has one child, Carrie. Bob has five children: Dave, Ed, Frank, Gail, and Hank. George's will leaves everything he owns to his children if they survive him, if not, then per stirpes (right of representation) to the descendants of his children. George's distributable net estate is estimated to be $100,000 (after taxes, creditors, and expenses have been paid).

Take the quiz below to see how much you know about what shares the grandchildren will inherit under different fact situations.

Questions

1. Assume that both Alice and Bob survive George. How will George's estate be distributed at his death?

___ A. Alice will inherit $50,000 and Bob will inherit $50,000.

___ B. Alice, Bob, and their children will inherit $12,500 ($100,000 divided eight ways).

2. Assume that George passes on, survived by Carrie, Bob and Bob's five children. At George's death, how will his estate be distributed?

___ A. Bob will inherit $100,000.

___ B. Bob will inherit $50,000 and Carrie will inherit $50,000.

___ C. Bob, his children, and Carrie will each inherit $14,285 ($100,000 divided seven ways).

3. Assume that George passes on, survived by Alice, Carrie, and Bob's five children. At George's death, how will his estate be distributed?

___ A. Alice will inherit $100,000.

___ B. Alice with inherit $50,000, and Dave, Ed, Frank, Gail, and Hank will each inherit $10,000.

___ C. Alice, Carrie, and Bob's five children will each inherit $14,285 ($100,000 divided seven ways).

4. Assume that George passes on, survived only by his grandchildren. How will his estate be distributed among his grandchildren?

___ A. Carrie will inherit $50,000 and Dave, Ed, Frank, Gail, and Hank will each inherit $10,000.

___ B. Each of the grandchildren will inherit $16,666 ($100,000 divided six ways).

___ C. Alice and Bob's shares will be distributed as they each directed under their wills.

5. The answers to the first four questions are different if Alice or Bob are survived by spouses.

___ True

___ False

6. If George dies without a will, how will his estate be distributed if both Alice and Bob pass on before him under our current state law?

___ A. Carrie will inherit $50,000 and Dave, Ed, Frank, Gail, and Hank will each inherit $10,000.

___ B. Each of the grandchildren will inherit $16,666 ($100,000 divided six ways).

___ C. Alice and Bob's shares will be distributed as they each directed under their wills.

7. George's will can direct that if both of his children pass on before him, his grandchildren will share equally.

___ True

___ False

8. If George's will leaves his property to the survivor of his two children, and Bob passes on before George, Bob's five children will be disinherited.

___ True

___ False

State-specific Answers to Case Study 5 Questions

Idaho

Iowa

Kentucky

North Dakota

South Dakota

Other Prepare Your Estate Plan Case Studies

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Credits

Adapted for use in the Legally Secure Your Financial Future: Organize, Communicate, Prepare program.

Content Development by:
Carol A. Schwab, J.D., LL.M.,
Former Professor and Extension Specialist, North Carolina State University.

This document is for non-profit educational purposes only. This document may not be used by a profit-making company or organization. When used by a non-profit organization, appropriate credit must be given to the Cooperative Extension Legally Secure Your Financial Future: Organize, Communicate, Prepare education program. Materials for this program were developed by a team from six land-grant universities. The program is included in the program toolkit of the Cooperative Extension Financial Security in Later Life national initiative. For more information go to: http://www.csrees.usda.gov/fsll.