Most of us look at our children with love, affection and deep hopes for their futures. One father, though, decided making it happen in this lifetime was too limiting so he put into place strict rules as part of his estate planning efforts, all with the goal of ensuring his two daughters become everything he knew in his heart they could be.
A whopping $20 million estate is what’s at stake and the two daughters, one who is 21 and her younger sister, who is 17, determine just how much of that estate –if any – they claim.
Maurice Laboz, was a wealthy real estate tycoon who died earlier this year. His two daughters, Marlena and her younger sister, Victoria were their father’s joy. He even made provisions for “early-bird bonuses” to his two girls, provided they marry right, secure good jobs and do not become unwed mothers.
Each will inherit $10 million apiece when they turn 35, but understanding they have needs today and in the immediate future, Dad provided a list of rules that must be adhered to, including:
Marlena has the option of receiving $500,000 once she marries, provided her beau signs a sworn statement promising to keep his hands off the cash.
She receives another $750,000 provided she graduates “from an accredited university” and is willing to memorialize in writing what she intends to do with the funds. She only has to write 100 words, which is about the length of this paragraph you’re reading. The trustees who were appointed by her father to oversee the funds – both the early disbursements and the final disbursement once each girl turns 35 – will also determine whether or not the essay is acceptable or requires more detail. Most young adults, upon their college graduations, would likely want to use the money to purchase their first home.
Both daughters have an impressive incentive to earn decent salaries by 2020. Each young woman is guaranteed to receive an annual payout of three times the income listed on their personal federal tax return. In a not-so-subtle nod to the taxman, their checks will be cut and provided to each girl on April 15th.
If each of the girls opt to not work outside the home and choose to become mothers (provided they married before becoming pregnant), she will receive from the trustees 3 percent of the value of their trust. This check will be provided on January 1st each year.
In a nod to the girls’ mother, he provides the same 3 percent if either of the girls become a caregiver to their mother. What’s interesting is that this seems like a generous nod to the mother of his children, but they were going through a divorce and she has learned she receives nothing from the estate. She intends to contest the estate.
Is this something you would consider in your own estate planning efforts? It’s an interesting take, though not all that unusual. For years, wealthier families have provided similar requirements in their wills, though we have to admit, we’ve not seen them quite this detailed. One final thought: the rest of his estate goes to a number of charities, including Meals on Wheels and the Michael J. Fox charity for Parkinson’s research.
- ￼What Do I Do If I Received a Crummey Notice? - September 29, 2022
- The Intersection of Asset Protection Planning and Estate Planning – Part I - September 20, 2022
- If an Estate Owes Federal Gift and Estate Taxes, How Do I Pay Them? - September 15, 2022