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Physics
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Barry creates a trust with property valued at $7 million. Under the terms of the trust instrument, Michelle (age 48) receives a life estate, while Terry (age 24) receives the remainder interest. In the month the trust is created, the interest rate is 4.4%. Determine the value of Barry's gifts.

Aug 19th, 2015

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A life estate deed is a deed form used to transfer property to one party automatically upon another party's death. The life tenant's interest is called a life estate. The interest that passes to the remainder beneficiary is called a remainder.

Michelle=(48/72)x7million

=4.667million

Berry's=(24/72)x7million

=2.333million

=2.333x(100+4.4)/100

=$2.436

Michelle is responsible for maintenance because she is the life estate owner. She must pay for the new furnace and can choose the type of furnace without Carol’s consent.

Berry has an ownership interest in the property subject to the life estate interest, but does not have the right to occupy, possess or otherwise use the property until the life estate is terminated.



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Aug 19th, 2015

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