Edward Thorpe of Reston, Virginia, was 65 when he retired in 2005. Victoria, his wife of 40 years,passed away the next year. Her will left everything to Edward. Although Victoria’s estate was valuedat...

Edward Thorpe of Reston, Virginia, was 65 when he retired in 2005. Victoria, his wife of 40 years,passed away the next year. Her will left everything to Edward. Although Victoria’s estate was valuedat $2,250,000, there was no estate tax due because of the 100% marital deduction. Their only child,Brandon Thorpe, is married to Beverly; they have four children, two in college and two in high school.In 2007, Edward made a gift of Merck stock worth $260,000 jointly to Brandon and Beverly. Becauseof the two $12,000 annual exclusions and the unified credit, no gift taxes were due. When Edwarddied in 2009, his home was valued at $850,000, his vacation cabin on a lake was valued at $485,000,his investments in stocks and bonds at $1,890,000, and his pension funds at $645,000 (Brandon wasnamed beneficiary). Edward also owned a life insurance policy that paid proceeds of $700,000.