Example
- Rosemary Mills, age 71, is a retired professional with two children and two grandchildren.
- Her children are polar opposites. One child is an advertising executive who is married with two children. The other has never been married and has a history of trouble with the law and some substance abuse.
- Her current estate value exceeds $10 million, so she will probably have an estate tax liability.
Goals and Objectives:
- Rosemary is considering transferring a large portion of her estate directly to her grandchildren and would therefore like to leverage her GSTT exemption.
- She places a strong value on education and wants future generations to incorporate this value in their own lifestyles; therefore, she would like to provide incentives in her trust document that would encourage all of her descendants to obtain a college degree.
- Because of her son’s history, Rosemary is nervous about leaving him a lump sum inheritance. Additionally, she would like to encourage him to settle down and get a steady job. Consequently, she decides to include an incentive provision in the trust which requires the trustee to match her son’s salary—hoping this will provide him the incentive to get his life in order.