[Solved] Assignment 219453


Assignment Details

Subject: Business    / Finance
QuestionKent, age 38, recently came to you for estate planning advice. He has never executedany estate planning documents. During the client interview, you learned that Kent hasnever been married and has a six-year-old daughter, Kerstin, with his previous girlfriend,Karen. Karen is Kerstin’s custodial parent and Kent sees Kerstin every other weekend.While Kent and Karen are cordial, the relationship was recently strained when Karenbegan dating Kent’s business partner, Bobby. Kent is in good health and participatesregularly in automobile racing competitions. While Kent often wins in competitions, hehas wrecked his car several times and has been seriously injured. Because Kent has hadso many wrecks, he invested a majority of his $500,000 net worth in a closely heldcompany to develop a revolutionary steel product that will not bend, crumble or catchfire. Kent and his business partner, Bobby, are sure that all race car companies will buythe steel product because their initial tests established that nine out of ten times a carmade with the product that was in a wreck did not even get a dent. Although they plan totake their product to market in a few months, Kent and his partner have had severaldisagreements. Which of the following statements is true?(a) If Kent died today, there would not be any liquidity issues because Kent’sshare of the closely held company could easily be sold for fair market value.(b)Since the value of Kent’s net worth is below $5,000,000, there is no need forestate planning.(c)Amounts given to Karen for Kerstin’s support are deductible on Kent’s incomeor gift tax return.(d)If Kent were to die today, his assets would transfer via state intestacy laws withKerstin being the most likely heir.

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