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Technology| Client Successes

Irrevocable Trusts Are Key to Protecting Estate

Situation

The married owners of a rapidly growing technology company planned to sell the company in three to five years. They sought ways to keep the liquidation proceeds within the estate, while minimizing estate taxes and creditor claims.

Result

The company was recapitalized into voting and non-voting interests. The husband and wife gifted/sold the non-voting interests, which may qualify for a valuation discount, into irrevocable trusts that they established for each other. This strategy protects all future appreciation in the company – as well as liquidation proceeds – from estate taxes and creditor claims. Additionally, the couple revised their revocable trusts to provide that assets passing to their children upon death will stay in trusts for the children’s lifetimes to provide creditor and divorce protection.

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