Hank and Wendy are your clients

Hank and Wendy are your clients. Hank and Wendy are married to each other, are both US citizens, and have two minor children. Their property consists of the following:- Commercial property (cost $850,000; fair market value $5,300,000) held in Hank’s name, as his separate property.- Money market accounts in the amount of $2,850,000; held in Hank’s and Wendy’s names as joint tenants.- Life insurance (death benefit of $3,750,000, cash value of $623,000); insuring Hank’s life, owned by Hank, with Wendy as the primary beneficiary and the children as contingent beneficiaries. Hank used his separate property funds to pay the premiums.- Life insurance (death benefit of $1,000,000, cash value of $147,000) on Wendy’s life, owned by Wendy, with the children as the primary beneficiaries. Wendy used her separate property fund to pay premiums.- Home (cost $650,000; fair market value $3,850,000); held by Hank and Wendy as joint tenants. The home has a $400,000 mortgage.- Market securities with a basis of $120,000 and a fair market value of $1,500,000, which was given to Hank by his father.Hank’s will provides that his entire estate be distributed outright to Wendy. Assume that Hank and Wendy have resided in California during their lifetimes.16. What is the federal estate tax paid on Hank’s death under his present estate plan? Assume that: (a) Hank’s death occurred in 2011 when exemption amount was $5,000,000; (b) Hank is survived by Wendy; (c) there are no funeral, last illness or administration expenses; and (d) Hank did not make any gifts during his life time.17. After the administration of Hank’s estate, what will Wendy’s total income tax basis be for each of the following assets?Commercial property-Home-Marketable Securities-18. Assume Wendy dies intestate after Hank in 2016. The assets in her estate have the same value they did at the time of Hank’s death. Compute the federal estate tax on Wendy’s death. Assume that (a) there are no funeral or last illness expenses and (b) Wendy did not make any gifts during her lifetime. Show the details of each step of your computation.19. Would the amount of taxes/probate fees paid by Wendy’s estate been any different if Hank and Wendy had a fully funded revocable trust which utilized an ABC trust structure (i.e., Survivor’s Trust-Exemption Trust-Marital Trust)? If so, why and what would the estate tax and probate fees be on Wendy’s death under that circumstance? Show details of each step of your computation.