Strategies to minimize estate tax. James and Susan Wagner have assets with fair market values of $12,700,000 and $4,800,000, respectively. James has been diagnosed with a terminal illness and is...

Strategies to minimize estate tax. James and Susan Wagner have assets with fair market values of $12,700,000 and $4,800,000, respectively. James has been diagnosed with a terminal illness and is expected to pass away within the current year. James wants to minimize his estate taxes, and any appropriate planning should consider the following factors:

a. James Wagner has debts of $210,000 against the assets in his estate.

b. It is estimated that administrative and funeral expenses will be $25,000 each for James and Susan.

c. Susan wanted to make contributions of $4,000,000 to charity during her remaining life expectancy. It is estimated that Susan would be able to live comfortably for the balance of her life.

d. Assume that Susan will live for three years after the year of her husband’s death.