The Situation

Elizabeth called Buttonwood after receiving grim news from her doctor; the cancer was back, and time was limited. We had served as Family CFO for her brother, and knew Elizabeth loved her family dearly; especially her three adult children, Tom, Tony, and Tina. Elizabeth led a successful life and her assets had grown significantly over the years. She knew when the time came, her three children would inherit a combined $15 million.

Roughly 10 years prior, Elizabeth worked with an estate planning attorney to get a Will in place, spelling out how she wanted her affairs handled and assets distributed. She designated her eldest son, Tom, as the executor of her will. Because the Will was nearly a decade old, it had been quite some time since she reviewed it. When we met with Elizabeth, we discussed her estate documents and found several areas where her wishes didn’t connect with what was written in her documents.

Our Strategy
Because her financial situation had changed over the last few years, Elizabeth needed a Trust in addition to a Will. None of her three children were entirely savvy in the matters of estate planning or settlement. As such, it was Elizabeth’s wish for them to avoid probate after her passing, a public court process that can take a year or longer for larger estates.

After listening to Elizabeth and her concerns for her children’s future, we invited Tom, Tony, and Tina to the conversation. Together, after learning more of the kids’ unique needs, we explored additional strategies to protect the kids financial futures. Tom was a successful Doctor. Tony had a mild case of autism and had difficulties keeping a steady job. Tina was an entrepreneur with a booming business.

In conjunction with Elizabeth’s estate planning attorney, she decided to adopt a Revocable Living Trust with additional language designed to protect Tom, Tony, and Tina.

The Result

The unfortunate day came when Elizabeth passed. Because her assets were correctly owned by her Revocable Living Trust, they avoided probate and simply transitioned into 3 unique irrevocable Trusts; one for each of her kids. Instead of each child receiving $5 million outright, the assets destined for the kids now belonged to each of their trusts and immediately assumed the protection offered by these Trusts. Elizabeth appointed Tom as the Trustee for his own Trust and Tina as the Trustee of her Trust. Because of their business-minded approach to finances, Elizabeth felt comfortable leaving them in charge to manage distributions to provide income through life. Because of Tony’s situation, Elizabeth worried he may not be fully equipped to manage his own Trust. As such, a corporate trustee was included for additional protection for Tony. However, Tony’s trust had unique ‘special needs’ language to allow for additional flexibility.

Tina’s business is booming but is highly leveraged. An economic downturn could have major impacts on business revenue. Should Tina be unable to operate her business, creditors may be able to claim both her business and personal assets. However, Tina’s Trust assets are not her assets – they are the assets of the Trust, and therefore may be able to remain protected.

By spending time listening to Elizabeth’s wishes, coordinating meetings with her children and her estate planning attorney, we were able to help preserve Elizabeth’s legacy, simplify her estate settlement and honor her wishes for her children. We regularly work through life’s challenges with our clients, often with a multi-generational focus, to accomplish unique family objectives.

If you would like to take a deeper look at your estate plan to ensure it truly reflects your wishes, we stand ready to assist.