Perpetuating the business while treating children fairly

Situation:

A couple in Chicago was concerned about the perpetuation of their commercial real estate business they spent so much time building together.

There are now 35 employees, including their son who has worked in the business for 20 years and is serving as CFO. They also have a daughter who has three kids and is married to a dentist in Maryland.

The couple wanted to treat each child equally, but they were concerned about what would happen to the real estate portfolio if it had to be split, and about the potential of it creating disagreements among their two children.

 

Action Steps:

The couple’s estate planning attorney brought in Grant, Hinkle & Jacobs to design a life insurance policy that will provide the immediate cash needed to equalize the heirs’ inheritances without having to sell or encumber the real estate.

It also fit hand-in-glove with the company’s established legal framework and could also be used to help mitigate potential estate tax liability.

 

Results:

The client is thrilled that they will be able to preserve their commercial real estate portfolio for the next generation and not create a financial situation that could lead to the deterioration of relations between their kids when they are no longer there to intervene.