Estimates the expenses at his death

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Reference no: EM133344690

The Pete and Emily Case PETE AND EMILY BACKGROUND Pete, age 58, and Emily, age 31, have been dating for about a year and a half. Pete and Emily met when Pete was on a vacation in the London. Emily was a beautiful British model by photographed at the market by Pete's hotel. After a month-long romance, Pete asked Emily to return to the United States with him. Although not a United States citizen, she has maintained residence in the United States for 15 months. While they have no current plans to marry, they recently found out that Emily is expecting her first child. Although no paternity tests have been conducted, both Pete and Emily are confident the child is Pete's. When they found out Emily was pregnant, Emily moved into the 4 bedroom home Pete owns so they could prepare for the baby, whom they plan to name Sylvester. To prove to Emily that he was serious about them being a family, Pete gave Emily $10,000,000 in a money market account in January 2019.

The money market account is the only asset Emily owns. Pete also purchased a $15,000,000 life insurance policy on his life and named Emily as the beneficiary. Pete was previously married and has two children from that marriage, Kate, age 38, and Pippa, age 33. Both girls are happily married and have children of their own. Kate has two children, Charlotte, age 3, and Louis, age 13. Pippa was unable to have children of her own; therefore, she adopted a little girl, Lilly, age 2, from Russia last year. Pete and his first wife, Diana, have been divorced for ten years and are not on speaking terms. After their marriage, Pete was required to pay Diana alimony in the amount of $18,000 per month. When the court order expired at the end of 2015, Pete felt bad so he continues to give Diana $18,000 per month on the first of each month. Although Pete has high blood pressure, he is otherwise healthy. Emily has never been married. She is in excellent health, and learned just a few days ago that they are having a baby boy, who is expected to be healthy. Pete is retired and owns Pebble Bar, a NYC bar, while Emily is currently unemployed. Pete and Emily live in a community property state. Pete's mother, Amy, also lives with him. Amy is 82 and in failing health. She was recently diagnosed with Parkinson's disease. While she is unable to feed or bathe herself, she is expected to live for several more years. Amy has already spent all of her retirement assets and relies exclusively on Social Security.

The only substantial asset she owns is a life insurance policy covering her life. The policy has a $100,000 death benefit. The policy does not have a named beneficiary. For estate planning purposes, Pete estimates the following expenses at his death:

1. The last illness and funeral expenses are expected to be $100,000.

2. Estate administration expenses are estimated at $180,000.

3. Funeral expenses are expected to be $120,000

Reference no: EM133344690

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