Bequests and Inheritance

Transferring Wealth and Asset Disposition at Death

The process of wealth transfer and asset disposition at death is crucial. This involves the movement of assets from the deceased to the beneficiaries. Proper planning is essential to ensure the assets are transferred as intended, avoiding unnecessary transfer taxes or unintended beneficiaries. This section delves into the legal frameworks governing asset disposition at death and the methods to achieve an individual’s dispositive goals upon death.

Bequests

Bequests are a crucial part of an individual’s financial planning, detailing the distribution of their wealth upon their demise. The structure of this plan can be influenced by the legal jurisdiction of the individual’s residence.

Legal Frameworks

The structure of a testamentary plan is significantly influenced by whether the individual resides in a civil law or a common law jurisdiction. Civil law, prevalent globally, is based on explicit guidelines for consistent law application. In contrast, common law, common in the United Kingdom and the United States, is adaptable and evolves based on judicial decisions.

Civil Law vs Common Law

In common law jurisdictions, individuals have the testamentary freedom of disposition by will, allowing them to decide the rights others will have over their property post-death. Conversely, civil law countries often impose restrictions through forced inheritance or forced heirship rules, mandating the decedent to benefit certain individuals like their children and spouse.

Estate Planning under Shari’a Law

The intricacies of estate planning in countries adhering to Shari’a law, the Islamic legal system. As noted by Robinson (2021), these countries exhibit significant variation but generally align more with civil law systems in terms of estate planning.

While Shari’a law may not be officially recognized in many countries, individuals desiring to follow Islamic inheritance guidelines can usually do so through a will, provided it doesn’t conflict with their country’s official law.

Legal Concept of Trust

The concept of a trust is unique to common law and may not be recognized in civil law countries, especially those not party to the Hague Convention.

Under the Hague Convention, each party acknowledges the validity of trusts, even if they don’t have their own trust law. This applies to civil law countries like France and Germany.

Forced Heirship

Forced heirship is a legal principle that is prevalent in civil law jurisdictions, including European Union countries, Brazil, Japan, and Switzerland. This principle imposes certain limitations on the free disposition of one’s assets, requiring individuals to leave a portion of their estate to specific family members, typically children or descendants. This obligation exists regardless of the relationship status between the parent and the child, whether the child is estranged, adopted, or conceived outside of marriage.

Implications of Forced Heirship

Forced heirship rules take precedence over the terms of a will. The only way to circumvent these rules is by locating assets abroad or creating a structure in a country where this restriction is not recognized, typically a common law country. For instance, a wealthy individual in Japan might move assets into an offshore trust in the Cayman Islands to avoid forced heirship rules. Another strategy is to reduce the value of the final estate upon death by gifting or donating assets to others during their lifetime, thereby reducing a forced heirship claim.

Claw Back Provisions

However, in several jurisdictions, including some governed by Shari’a law, claw back provisions may apply. These provisions can bring lifetime gifts back into the estate for calculation purposes, such as determining the child’s share. If the remaining assets in the estate are insufficient to cover their claim, the child may be able to recover their forced share from the donees who received the lifetime gifts.

Community vs. Separate Property Regimes

In countries like the United States, the Community Property Regime is common. Here, each spouse has an equal, indivisible interest in income and certain assets acquired during the marriage. For example, if a couple in California purchases a house after marriage, both have an equal share in it. However, personal gifts or inheritances, whether received before or during the marriage, remain separate property.

Upon a spouse’s death, the property division occurs in two parts. The surviving spouse automatically gets half of the community property. The remaining half is transferred through the deceased’s will via the probate process, a legal procedure validating the will.

Separate Property Regimes

Contrarily, Separate Property Regimes are typical in civil law countries. Here, each spouse can own, control, and dispose of property individually, albeit subject to the other spouse’s rights. For instance, in France, a spouse can sell their property without the other’s consent, but the spouse’s rights are still protected.

Interestingly, in many civil law countries, couples can choose the marital property regime applicable to their property. The treatment of inheritances, whether acquired before or during marriage, varies by jurisdiction. Some places, like Texas, consider them separate property, while others, like Spain, may deem them community property if acquired during the marriage.

Community Property Regimes

Community property regimes are legal frameworks that view assets accumulated during a marriage as mutually owned by both partners. This implies that in case of a divorce, these assets are subject to an equal division.

In certain jurisdictions, like the United Kingdom, inherited assets that are accessible to a spouse might be deemed part of the family assets. This could greatly influence a family’s goal to maintain a family business within the family across several generations.

Divorce Risk

Considering the high divorce rates in some countries, it’s crucial to factor in the risk of divorce when planning for the future of family assets. In some nations, nearly half of all marriages result in divorce.

Trusts and other legal arrangements can offer protection for a family business depending on their structure and implementation. These legal instruments can help ensure that a family business stays within the family, even in the event of a divorce.

Inheritances Received Before vs. During Marriage

This section discusses the differences in the treatment of inheritances received before and during marriage under community property regimes. It is an important concept in financial planning and asset division in the event of a divorce.

Inheritances Received Before Marriage

Consider a scenario where John inherits a house from his parents before he marries Jane. Under community property regimes, this house is generally treated as John’s separate property. This means that the house is considered the sole property of John, not part of the marital community property. Therefore, in the event of a divorce, the house is not automatically subject to division.

Inheritances Received During Marriage

Now, let’s assume that John receives another inheritance, this time a sum of money, after he is married to Jane. The text does not provide specific details about the treatment of such inheritances. However, it can be inferred that the treatment may differ from those received before marriage. This could mean that the money might be considered part of the marital community property and subject to division upon divorce.

Inheritances Received During Marriage

Understanding the categorization of inheritances received during marriage is crucial, especially in the context of community property regimes and separate property regimes. These regimes have different rules and exceptions that can significantly impact the division of assets in the event of a divorce.

Community Property Regimes

• In community property regimes, such as those in place in states like Texas and Nevada, assets acquired during the marriage are generally considered community property, implying joint ownership and division upon divorce.
• However, exceptions exist for inheritances. For example, in California, an inheritance received during the marriage is considered the separate property of the receiving spouse, provided it is not commingled with community property funds.
• Commingling, such as depositing the inheritance into a joint bank account, would categorize the inheritance as community property.

Separate Property Regimes

• In separate property regimes, like those in New York or Illinois, assets acquired before the marriage or during the marriage through inheritance or gift are considered the sole property of the individual who received them.
• Inheritances are generally treated as separate property regardless of when they are received. They are not subject to division upon divorce and remain the exclusive property of the inheriting spouse, provided the inherited funds are not commingled with joint accounts or used for joint expenses.

Estate Planning Components

An estate is the sum of an individual’s assets, including financial holdings like bank accounts, stocks, bonds, or business interests, tangible personal assets such as artwork or vehicles, immovable property like houses or land, and intellectual property like patents or royalties, owned and controlled by them before their death.

Disposition of Estate

Upon an individual’s death, their estate is disposed of according to their testamentary documents, such as a will or testamentary trust, if they have full freedom of disposition in a common law jurisdiction.

If an individual dies intestate, i.e., without a will, the law of their domicile, whether in a civil law or common law jurisdiction, dictates the distribution of their assets. Assets transferred to an irrevocable trust during an individual’s lifetime as a gift, known as a lifetime gratuitous transfer, may be excluded from their estate.

Difference in Legal and Tax Purposes

The components of an estate can vary for legal and tax purposes. For example, assets transferred to a trust may be legally owned by the trust, not the settlor, but may still be considered the settlor’s assets for tax purposes, depending on the tax law and trust structure.

Estate Planning

Estate planning includes the transfer of property during one’s lifetime and upon death. For instance, a real estate mogul might have an estate plan that details how his properties should be distributed among his children after his death. It may also encompass arrangements for other personal matters such as funeral arrangements and end-of-life medical instructions in case of incapacitation. Estate planning often requires the advice of various professionals including financial, legal, and taxation experts.

Probate

Probate is a legal process that confirms the validity of a will. It is often a process that individuals wish to avoid due to potentially large court and other fees, delays in asset transfer to beneficiaries, and the freezing of assets during the probate proceeding. For example, a famous musician’s will might be contested in probate court, leading to a lengthy and costly legal battle. Probate can also become complicated when multiple jurisdictions are involved.

Avoiding Probate

Probate can be avoided or its impact reduced by holding assets in other forms of ownership such as joint ownership, living trusts, or retirement plans. For instance, a couple might hold their home as joint tenants, allowing the surviving spouse to automatically inherit the property upon the other’s death, thus avoiding probate.

Types of Property Ownership

Property in an estate can be held in various ways including sole ownership, joint ownership, partnership, trust, or through life insurance. Assets held in sole ownership are typically considered part of a decedent’s estate and their transfer is dictated by the decedent’s will or applicable intestacy law through the probate process.

Joint Tenants with Right of Survivorship (JTWROS)

In some jurisdictions, individuals can hold assets as joint tenants with right of survivorship (JTWROS). In this case, two or more individuals own a property or an asset together, and upon the death of one of the owners, the deceased owner’s interest in the property automatically passes to the surviving owner(s), thus avoiding the probate process.

Trusts and Life Insurance

The transfer of assets held in trust and the payout of death benefit proceeds under a life insurance policy depend on the terms of the trust and the provisions of the life insurance contract, respectively. Trusts, life insurance, and other similar planning techniques can therefore transfer assets outside the probate process and can be important estate planning tools.

Estate and Succession Planning

The concept of testamentary gratuitous transfers, taxation, and the differences between estate and inheritance taxes. Testamentary gratuitous transfer is a legal term referring to the process of transferring assets posthumously. For the recipient, this is known as an inheritance.

The taxation of these transfers can vary based on factors such as the residency or domicile of the donor and donee, the type of asset, and its location. Taxes on wealth transfers can be applied either to the donor or the donee. For instance, some jurisdictions impose an estate tax, which is generally the liability of the donor’s estate. Conversely, other jurisdictions impose a wealth transfer tax on the donee, commonly known as an inheritance tax.

Similar to gift taxes, estate and inheritance taxes can be applied at a flat rate or based on a progressive tax rate schedule. The tax rate may also vary depending on the relationship between the donor and the donee. For example, transfers to spouses are typically tax-exempt.

Tax implications on bequests

The tax implications on bequests is crucial for effective estate planning. This is particularly relevant in countries like Australia, Canada, and Colombia, where a tax is imposed on bequests as deemed dispositions. This tax is not levied on the principal value of the transfer, but only on the value of unrecognized gains, if any.

When structuring an estate plan, it should at least accomplish three goals: fulfilling the wealth transfer wishes of the decedent, minimizing taxes payable at death, and minimizing conflict among family members, friends, and other interested parties at the death of the decedent. Tools such as lifetime estate tax exemptions or exclusions, marital exemptions or deductions, and charitable gratuitous transfers can be used to achieve these goals.

Lifetime Estate Tax Exemption or Exclusion

The Lifetime Estate Tax Exemption or Exclusion is a legal provision in many jurisdictions, including the United Kingdom and the United States, that allows a certain amount of assets to be passed on to beneficiaries without the imposition of estate taxes. For example, in the UK, no inheritance tax is typically required if the estate’s value is below GBP 325,000. In contrast, in the US, the exempt amount is currently USD 12,920,000, although this figure is subject to legislative changes.

Benefits of Establishing a Trust

For individuals with estates exceeding these amounts, establishing a trust for the surviving spouse and descendants can be beneficial. This arrangement can protect the assets, their appreciation in value, and income from estate taxation upon the surviving spouse’s death. If the trust is irrevocably drafted, it can also offer protection to the grantor against creditors and subsequent spouses.

Generation-Skipping Tax Exclusion

In the US, if a decedent has not utilized their full generation-skipping tax exclusion amount during their lifetime, the remaining amount can be applied to this trust. This action can protect the trust from future estate and generation-skipping taxes. Consequently, this trust can be structured as a dynasty trust to last for multiple generations.

Portability of the Exempt Amount

The US also allows for the portability of the exempt amount from the deceased spouse to the surviving spouse. This provision enables a surviving spouse to use a deceased spouse’s unused exempt amount, adding valuable flexibility to an estate plan. If an exemption is not portable, it is lost upon the death of the first spouse. Therefore, a well-constructed estate plan would consider the possibility of using the exemption by transferring the exemption amount to a non-spouse beneficiary.

Strategy in an Appreciating Market Environment

In an appreciating market environment, it is generally advisable to use the exemption sooner rather than later. This strategy removes future appreciation out of the estate, thereby reducing the potential estate tax liability.

Marital Exemption or Deduction

The Marital Exemption or Deduction is a provision in the United States tax law that allows a deceased individual to pass on their assets to their surviving spouse without incurring estate taxes. This provision, however, only defers the tax payment until the death of the surviving spouse.

An effective estate plan often divides the estate into two parts. The first part, known as the “exemption trust,” includes assets that are exempt from estate taxes. The second part, the “marital deduction trust,” comprises the remaining assets that qualify for the unlimited US marital deduction.

Real-World Example

Consider a couple, John and Jane Smith. Upon John’s death, his estate plan creates two trusts. The first trust, the exemption trust, includes John’s assets worth $11 million, which are exempt from estate taxes. These assets are for Jane’s benefit and, at her discretion, for their children. Upon Jane’s death, these assets will not be subject to estate tax.

The second trust, the marital deduction trust, includes the remaining assets worth $39 million. These assets qualify for the unlimited US marital deduction. Upon Jane’s death, these assets will be subject to estate tax.

This plan does not depend on the portability of John’s estate tax exemption amount, which is now in a trust, as is his fully utilized unlimited marriage deduction amount.

Charitable Gratuitous Transfers

Charitable Gratuitous Transfers refer to the wealth transfers made to non-profit or charitable organizations. These transfers are often favored due to the tax benefits they offer. For instance, consider the Bill and Melinda Gates Foundation, which is a prime example of a large-scale Charitable Gratuitous Transfer.

Tax Benefits

There are two primary tax benefits associated with these transfers:

• Exemption from gift or estate tax: Similar to how donations made to the American Red Cross are not subject to gift or estate tax.
• Income tax deductions: Donations made to charitable organizations, like UNICEF, are typically allowed for income tax deductions.

These tax benefits make Charitable Gratuitous Transfers an efficient method for families with philanthropic aspirations to transfer wealth. Moreover, charitable organizations may also be exempt from paying tax on investment returns, allowing for tax-free compounding of investment returns, significantly impacting wealth accumulation over long periods.

Efficiency of Charitable Gifts

The efficiency of charitable gifts compared to taxable bequests can be explored using a similar framework to that used for tax-free gifts and bequests. The relative after-tax future value after n years of a charitable gift compared to a taxable bequest is given by the following formula:

$$RV_{\text{CharitableGift}} = \frac{FV_{\text{CharitableGift}}}{FV_{\text{Bequest}}} = \frac{(1+r_g)^n + T_{oi} [1 + r_e (1 – t_{ie})]^n (1 – T_e)}{[1 + r_e (1 – t_{ie})]^n (1 – T_e)}$$

Where:

• \(FV_\text{CharitableGiftRV}\) is the relative after-tax future value of a charitable gift.
• \(\text{CharitableGiftFV}_\text{Bequest}\) is the future value of the charitable gift bequest.
• \(r_g\) is the rate of growth of the charitable gift.
• \(n\) is the number of years.
• \(T_{oi}\) is the tax on investment returns.
• \(r_e\) is the rate of return on the investment.
• \(t_{ie}\) is the tax on investment earnings.
• \(T_e\) is the tax on the estate.

Maximizing Tax Benefits through Charitable Giving

Charitable giving can have significant tax implications. Understanding these implications can help donors maximize their charitable impact and minimize their tax burden. This topic explores the variables involved in calculating the tax advantages of charitable giving and how they affect the relative value of making a tax-free charitable gift compared to a bequest.

• r and r: These represent the pretax returns to the charitable gift recipient and the estate making the charitable gift, respectively. For example, if a charity invests a gift and earns a 5% return, that would be the r for the charity.
• t: This is the effective tax rate on investment returns on the estate making the charitable gift. For instance, if the estate’s investments are taxed at 20%, t would be 0.20.
• T: This is the tax rate on ordinary income and represents the current income tax benefit associated with a charitable transfer. If the donor’s income tax rate is 30%, T would be 0.30.
• T: This is the estate tax if the asset is bequeathed at death. If the estate tax rate is 40%, T would be 0.40.
• n: This is the expected time until the donor’s death, at which point the asset would transfer and be subject to estate tax if it had not been donated to charity. If the donor is expected to live for another 10 years, n would be 10.

Numerator and Denominator

The numerator represents the future after-tax value of the tax-free charitable gift, while the denominator represents the future after-tax value of a taxable transfer by bequest. The ratio is the relative value of making the tax-free charitable gift compared to the bequest.

Tax Advantages of Charitable Giving

The tax advantages of charitable giving allow the donor to either increase the charitable benefit associated with a given transfer of excess capital from the estate or to use less excess capital to achieve a given charitable benefit.

Defining a Wealth Transfer Strategy

A wealth transfer strategy is a comprehensive plan that strategically combines lifetime gifting and transfers at death. The primary objectives of this strategy are to maximize the transfer of wealth, minimize taxes paid, and minimize the potential for conflict.

Combining Gifting and Testamentary Transfers

For instance, a high-net-worth individual collaborates with their private wealth advisor to determine the amount they intend to leave to their descendants. This amount is then gifted in trust for the benefit of those descendants during the client’s lifetime. The gifting is structured using various tools to minimize or eliminate the transfer taxes on their gifting.

Tools for Structuring Gifting

• Marital deductions: These are deductions that can be claimed by a married individual on their tax return.
• Lifetime estate tax exemptions: These are exemptions that reduce the amount of estate tax that an individual owes over their lifetime.
• Trusts and other structures: These are legal entities that can be used to hold and manage assets for the benefit of others.
• Valuation discounts: These are reductions in the value of an asset for tax purposes.

The client retains sufficient assets to meet their lifetime needs. At the client’s death, if the descendants’ gifts are fully funded, the remaining assets can be left to a spouse, if any, to qualify for the marital deduction. At the spouse’s subsequent death, or if there is no spouse, the remaining assets can be left to a charitable entity, thereby avoiding transfer taxes.

Minimizing Conflict

Transferring wealth after the demise of an estate owner can often lead to conflicts among beneficiaries. This section discusses strategies to minimize such conflicts and ensure a smooth transition of wealth.

Objective

• The primary goal of a well-structured wealth transfer plan is to minimize potential conflicts among the beneficiaries after the demise of the estate owner. For instance, the owner of a multinational company might want to distribute his assets among his children without causing any disputes.

Strategies

• Transparent and inclusive communication among all affected parties is the most crucial strategy to avoid conflicts. For example, a family meeting where the estate owner explains his/her decisions can help in reducing misunderstandings.
• Use of no contest clauses is another technique. These clauses aim to disinherit a beneficiary who tries to challenge the estate plan. However, these provisions are not always recognized as valid, so it’s essential to consult local law before relying on this type of provision.

Communication

• Initiating a conversation about money among wealthy family members can be challenging. Money can be a taboo topic and difficult to discuss, especially if a family-owned business is a major asset of an estate. Issues of ownership and succession can significantly complicate such discussions.
• Despite these challenges, it’s crucial for the elder generation to discuss their overall estate plan and the considerations that went into developing that plan with the rising generation. Once the elder generation has passed away, the opportunity to understand why an estate plan was devised in a certain manner dies too.
• Having the rising generation’s input in the plan empowers them and may avoid conflict and resentment. For example, involving the younger generation in decision-making processes can help them understand the rationale behind certain decisions, thereby reducing potential conflicts.

Blended Family

Managing wealth and planning estates in blended families, especially those with children from previous marriages, can be complex. This complexity often stems from conflicts over the deceased’s estate distribution, with stepchildren and surviving stepparents having different expectations. For instance, consider the real-world example of the Smith family, where Mr. Smith’s will was contested by his stepchildren after his death, leading to a protracted legal battle.

Open Communication and Clear Guidelines

Open communication and clear guidelines about estate distribution can mitigate such conflicts. For example, the Johnson family held regular family meetings to discuss their wealth distribution plans, ensuring everyone’s expectations were aligned.

Trust Administration

Trust administration can also be a contentious issue. If the surviving stepparent is the trust beneficiary and the children (including stepchildren) are the remainder beneficiaries, disagreements may arise. For instance, the stepchildren may question the distribution of assets from the trust to the stepparent, as it reduces their eventual share.

Investment Strategy

The trust’s investment strategy can also cause disputes. The surviving stepparent might prefer a conservative, income-oriented portfolio, while the heirs might favor a growth-oriented, capital appreciation portfolio.

Family Governance

Effective family governance, as discussed in the previous reading, can help avoid these conflicts. By considering all family members’ interests, it’s possible to ensure a smoother wealth transition.

Practice Questions

Question 1: Mrs. Johnson, a widow, died without a valid will. The court had to step in to decide how her assets would be distributed among her two children and five grandchildren. In this scenario, what term best describes the assets that Mrs. Johnson’s descendants received after her death?

1. Bequest
2. Intestacy
3. Inheritance

Answer: Choice C is correct.

The term that best describes the assets that Mrs. Johnson’s descendants received after her death is Inheritance. Inheritance refers to the assets that an individual receives from a deceased person, usually a relative, through the legal process. In this case, Mrs. Johnson’s assets were distributed among her two children and five grandchildren by the court, which is a typical scenario when a person dies without a valid will. The process of distributing the assets of a deceased person to the rightful heirs is governed by inheritance laws, which vary from jurisdiction to jurisdiction. Inheritance can include any type of property, such as real estate, personal property, cash, and investments. It is important to note that inheritance is subject to taxes in many jurisdictions, which can significantly reduce the value of the inherited assets.

Choice A is incorrect. A bequest is a gift of personal property or financial assets, such as stocks or bonds, that is made in a will. In this case, Mrs. Johnson did not have a valid will, so her assets could not have been distributed as bequests.

Choice B is incorrect. Intestacy is the condition of the estate of a person who dies without having made a valid will or other binding declaration. Although Mrs. Johnson died intestate, the term does not describe the assets her descendants received after her death. Instead, it describes the legal state of her estate at the time of her death.

Question 2: An individual is planning for the transfer of their wealth upon their death. They reside in a jurisdiction that follows common law and they wish to exercise their testamentary freedom of disposition by will. This means they want to use their own judgment regarding the rights others will have over their property after their death. Which of the following best describes the legal framework that would allow them to do this?

1. The individual resides in a civil law jurisdiction that places restrictions on such disposition through forced inheritance or forced heirship rules.
2. The individual resides in a common law jurisdiction like the United Kingdom or the United States that generally allows a testator testamentary freedom of disposition by will.
3. The individual resides in a civil law jurisdiction that generally allows a testator testamentary freedom of disposition by will.

Answer: Choice B is correct.

The individual resides in a common law jurisdiction like the United Kingdom or the United States that generally allows a testator testamentary freedom of disposition by will. In common law jurisdictions, individuals are generally allowed to exercise their testamentary freedom of disposition by will. This means they can decide who will inherit their property after their death and in what proportions. This is a key feature of common law systems, which are based on the principle of individual autonomy and property rights. The testator can choose to leave their property to anyone they wish, subject to certain legal restrictions such as the rights of spouses and dependents. This freedom of disposition is a fundamental aspect of property rights in common law jurisdictions and is a key factor in estate planning.

Choice A is incorrect. The individual resides in a civil law jurisdiction that places restrictions on such disposition through forced inheritance or forced heirship rules. This statement is incorrect because the question clearly states that the individual resides in a common law jurisdiction, not a civil law jurisdiction. In civil law jurisdictions, the law often imposes restrictions on testamentary freedom through forced heirship rules, which require a certain portion of the deceased’s estate to be left to certain relatives, such as children or spouses.

Choice C is incorrect. The individual resides in a civil law jurisdiction that generally allows a testator testamentary freedom of disposition by will. This statement is incorrect because, as mentioned above, civil law jurisdictions often impose restrictions on testamentary freedom through forced heirship rules. While some civil law jurisdictions may allow some degree of testamentary freedom, it is generally more limited than in common law jurisdictions.

Glossary

• Testator: The person who makes a will.
• Intestacy: The condition of an estate of a person who dies owning property greater than the sum of their enforceable debts and funeral expenses without having made a valid will or other binding declaration.
• Bequest: A sum of money or property left to someone in a will.
• Trust: A legal arrangement where one party holds assets for the benefit of another.
• Estate Planning: The process of arranging the distribution of an individual’s estate.
• Probate: A legal process that confirms the validity of a will and settles the estate of a deceased person.
• Estate Tax: A tax levied on an heir’s inherited portion of an estate if the value of the estate exceeds an exclusion limit set by law.
• Generation-Skipping Tax Exclusion: A tax law allowing for an individual to give a substantial amount free of estate taxes to beneficiaries who are two or more generations their junior.
• Marital Exemption or Deduction: A provision that allows a deceased individual to pass on their assets to their surviving spouse without incurring estate taxes.
• Charitable Gift: A donation of money or property to a non-profit organization.

Private Wealth Pathway Volume 2: Learning Module 7: Transferring the Wealth; LOS 7(b): Discuss and recommend appropriate wealth management planning approaches for transferring wealth at death through bequests and inheritance.