Cal. Code Regs. Tit. 18, § 15552.3 - Life Estate, Successive Life Estate and Remainder
If income or an estate is given to one person for his use or enjoyment during his life and upon death of that life tenant to another person for the latter's use or enjoyment for life, and upon death of the latter life tenant the remainder is given to a third person, the present values of the respective interests of the three persons as of the date of the gift are computed as follows:
The provisions of this regulation may be illustrated by the following example:
EXAMPLE.
Donor gives the annual income from $300,000 in trust to A, a female, for life. Upon the death of A the annual income is payable to B, a male, for life, and upon B's death the remainder payable to C. At the date of gift, the ages of A and B, respectively, are 66 and 42. Table A(2) of Section 15552.8 indicates the life estate factor in column 3 for a female age 66 is .54211. The present value of A's life estate, as of the date of the gift, is $162,633 ($300,000 x .54211). Table A(1) indicates the life estate factor for a male age 42 is .76967. The present value of B's single life estate as of the date of the gift is $230,901 ($300,000 x .76967). The present value of B's successive life estate as of the date of the gift is $68,268 ($230,901 - $162,633). The present value of C's remainder interest in the property as of the date of gift is $69,099 ($300,000 - $230,901).
NOTE: Reference: Section 15552, Revenue and Taxation Code.
Notes
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