Estate Planning question

Kind of confused by the example from Schweser class example, please help: Community property regime • Surviving spouse receives ½ marital estate • Forced heirship rules entitle surviving spouse to 30% of the estate • Children split 30% of the estate • During marriage husband inherits $1,000,000. Not considered part of marital assets • Marital assets total $1,800,000 Now assume the husband had been ailing for a while and wanted to favor the child at home by giving her $1,500,000 before he died • Wife agreed to the gift • Determine the amount, if any, available for the estranged child Answer: The $1,500,000 gift is added back to the estate to determine the children’s entitlement • Total estate = $2,800,000 • Children split (0.30)($2,800,000) = $840,000 Estate after gift = $1,300,000 • Half to wife leaves $650,000 for children to split • Only $325,000 per child • Estranged child can file suit to recover assets (from the other child) to meet the $420,000 entitlement The confusion is at the very end. why the “Children split 30% of the estate” rule doesn’t apply any longer? why the 2 kids split the remaining of the 50% of the $1,300,000, and each gets the $325,000??? Thanks!

I seem to recall an Errata on that problem.

really? I am not seeing any update/errata in workbook slide session for this question on the schweser website. Please advise.

becoz gifting just prior to death under such forced heirship jurisditions is treated as if gift was made intentionally to reduce estranged child’s share. so law requires that such disadvantages are effectively reversed so as to be fair to all his kids (whether conceived within or outside of current marriage)

Looks like it was for an example on page 257 of Schweser book 1.

also same eg in schweser video series

It’s called the clawback provision, if I recall.

thanks! But based on the eg on page 257. And since the law requires that such disadvantages are effectively reversed so as to be fair to all his kids (whether conceived within or outside of current marriage). In the eg I brought up in the question, Why the estranged child doesn’t get the $420,000 directly? the slide in schweser said the estranged chile can file suit to recover the assets to meet $420,000.

he cant get it directly becoz the gift of 1.5mn has been made already by the deceased. its not free so to speak to be divided among the kids. To retreive that a,mount from the other kid, he has to file claim for his share.

This is what I understand. For children, the only rule applies is forced heirship. - The forced heirship: 1/3 of total estate including clawback and separate property: - 1.8 +1 = 2.8. Kids split 1/3 of that = 840 K -> each should get 420K. The next question is where can they get this amount, since there is not that much left in the estate, after the wife has taken her share (highest priority). For wife: she is entitled to use TWO rules. She is entitled to get the biggest amount: - Forced heirship = 840 K or - Community property: half of whatever is left of marital assets after having given gift. Assuming that he gave 1M of his own property and 500K of marital property -> martial assets = 1.3M -> wife gets half = 650K. So wife should get 840K (according to example 1 pg 221). Now, since she has agreed to the gift, I assume that she will have to accept the lower amount, i.e., 650K. So there is 1.2M – 650 K = 650 K left for the children, so there is a shortage of 840K – 650K = 190K. The estranged kid has to file a suit to get the full share of 420K instead of 325K= 650K/2 left.

the slide example, the estranged child has been avoided forced heirship. But he can claw back! vs. the book example, the estranged child has claimed the forced heirship rule. Thanks!