Karen Died on May 5 of the Current Year

question 55

Essay

Karen died on May 5 of the current year. Her executor elects date-of-death valuation. Karen's gross estate possibly includes the following items:
• Joint checking account (with her husband), which has a balance of $10,000. Her husband did not contribute to the account.
• Joint savings account (with her daughter), which has a balance of $50,000. Her daughter did not contribute to the account.
• Life insurance policy on the life of Karen, having a face value of $400,000. The cost of a comparable policy immediately before Karen's death is $150,000. Karen's estate is the beneficiary.
• Life insurance policy on the life of Karen's daughter, having a face value of $100,000 with an interpolated terminal reserve immediately before Karen's death of $30,000.
Unexpired premiums are $5,000. Karen is the beneficiary. How much, if any, of these items are included in Karen's estate?

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Definitions:

Unity

In economic terms, unity can refer to a sense of agreement or cohesion among members of a market or organization, striving towards common goals or values.

Inelastic

Characterizes a condition in which the demand for a good or service is relatively unresponsive to changes in its price.

Elasticity of the Demand

A measure of how the quantity demanded of a good responds to a change in its price.

Technological Changes

Innovations or improvements in technology that enhance productivity, efficiency, or quality in the production of goods and services.