Case Study Estate Planning

Preserving an Estate Posthumously

An elderly husband and wife asked us to plan their estate, with its combined worth of $5 million. Their reciprocal wills provided that all assets were to be left to the surviving spouse in trust, with the remainder to be divided among their three children when the second spouse died.

Tragically, the husband died a few days after we met, before either will had been changed. During the process of sorting out the husband's estate, the wife became ill. She passed away a few months later.

The challenge was to preserve the estate posthumously. Our estate planning professionals analyzed the situation. We did three things:

1. We effectively used disclaimers to transfer assets out of the estate without triggering an estate tax.

2. We declined to qualify the husband's estate for the marital deduction, which allowed the use of the husband's estate exemption that would have otherwise been wasted.

3. Lastly, we were able to discount the value of some closely held interests based on their lack of marketability, which lowered the taxable amount.

In all, our post-mortem planning preserved more than $500,000 to pass on to the heirs rather than the government.

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