A married couple in their mid-50’s came to us with several questions. They had founded and recently sold a business, netting them $30 million. They had three adult children and two grandchildren, and had simple wills which had been drafted 30 years before, at the birth of their eldest child.

Before addressing how to invest their newly- acquired funds, the couple wished to revisit their estate plan, with several goals foremost in mind.

1. At their deaths, they wanted to avoid having their estate settled in a public probate process.
   
2. They wanted to minimize estate taxes while creating a legacy for their children and grandchildren.
   
3. They wanted to establish a simple fund from which to make charitable gifts.
   

We referred the couple to an experienced Trusts and Estates attorney to work with us advising them on their plan and to create all of the documents.

The plan began with the creation of living trusts, through which the couple’s estate would be administered outside of probate. The couple were eligible for a combined $23.4 million exemption from estate tax, but the remaining $6.6 million of their new assets, plus two retirement accounts and their home left them with $9 million subject to a 40% Federal estate tax. We recommended gifting the 401(k)’s to several of their favorite charities upon their deaths, and the creation of generation-skipping trusts. The trusts named their children as income beneficiaries, with the trusts’ principal eventually passing outright to their grandchildren in equal shares.

For the remaining $2 million, we recommended a donor-advised fund from which the couple could make charitable gifts in addition to the amounts granted from their 401(k)’s at their deaths.