The Situation:

Our clients were a married couple who owned a successful business with a net worth of over $40M. While our clients were careful in purchasing life insurance, they had never done any estate planning. Since their children were still young, they wanted to make certain that the business continued after their passing, and that the children continued their education and not receive a lump sum amount upon both of their passing.  The couple also wanted to leave an endowment for their favorite charity.

What We Did:

We immediately drafted wills for the couple so that there would be added protection over the state’s rules of distributing assets of someone who dies without a will. We also set up a life insurance trust to hold the proceeds of the life insurance. We named the surviving spouse as the life beneficiary and the kids as remainder beneficiaries. This means that the funds would be kept out of the surviving spouse’s estate while still allowing them to benefit from the proceeds. We also set up a trust for the children, maintaining that they could not get a full distribution of assets. The trust stipulated that the children would first get money for their educational expenses and that they would get distributions from the trust at age 25, 30 and 35.  We also created charitable trusts so that their favorite charity could continue on and receive funds even after their passing.