Mary and Robert Trenticosta Case

Mary and Robert Trenticosta Case

Diane George

Andrew Hill

Christian Perez

Christina Lu

Sulaiman Zamanudin

Issues and Suggestions

* Refinance their Mortgage

The treasury yields are way higher in the case then right now. This suggests much higher interests rates in the case compared to today. However, if we are looking at this case from today’s perspective then the mortgage rates of 7.5% and 7% on their property is way too high. The Trenticostas should refinance their mortgages and pay the closing costs on them instead of financing the closing costs into the loan.

* Increase diversification of investment portfolio

The Trenticostas have a good amount of diversification in their investment portfolio and a good amount of money invested. However it would be even better if they added foreign mutual funds to increase their diversification more and increase their returns.

* Establish an Irrevocable Life Insurance Trust (ILIT)

Mary wants to leave 1 million to each of her children and a lot of this will come from her life insurance. It would be wise for her to create a trust that insures this will happen the way she wants. This will also save her money on her estate taxes because the money from the insurance policy will not be included in her taxable estate. The proceeds from the life insurance can also be used to pay the estate taxes after her death preventing assets having to be liquidated in order to pay the estate tax.

* Establish a Qualified Terminable Interest Trust (QTIP)

Currently Mary has a lot of assets that will go to probate. She currently only has a will. We recommend creating a trust, specifically a Qualified Terminable Interest Trust (QTIP) to avoid her assets from being divided through probate court.

Mary is also worried about providing for Robert, while also providing for her kids once she dies. We recommend setting up a Qualified Terminable Interest Trust (QTIP), because it satisfies both her needs. The Qualified...