Generational Succession Planning for High Net-Worth Families

Cendrowski Corporate Advisors engaged with an estate for generational succession planning after the death of a spouse. The assets were organized into a marital trust, a non-exempt trust, and a preferred equity LLC. The majority of the marital trust assets were contributed to the LLC, along with the portfolio assets of the surviving spouse. Upon the creation of the LLC, the non-preferred equity contribution received a 42% discount in value on the stocks and bonds, which ended up saving our client a substantial amount in gift taxes. Upon the second spouse’s death and after a step-up in basis as of the date of death, the overall value of the non-preferred LLC interests was discounted an additional 67%, saving another substantial amount in estate taxes. These results went through a taxable estate audit with no changes or questions.