Client had a substantial position in a privately held company. The company was growing rapidly with the expectation that valuations could potentially quadruple over the next three years. Client needed access to the funds during their lifetime but was looking to minimize their estate tax liability upon the death of the second spouse.

The Waterloo Way

Waterloo first recommended a solution and then brought in a renowned estate tax attorney from one of the leading firms in the country. We worked to establish a plan that would accomplish all of the client’s goals. The result was the establishment of a pair of spousal access trusts that designated the children as the beneficiaries. We were able to take advantage of the current gifting laws that were set to expire at year-end. $5 million of privately held securities were moved into each trust, the client retained access to funds during their lifetime, after which, the proceeds pass through to the children estate tax free. The value of the securities at 2013 year-end was approximately $15 million per trust and our solution effectively saved the client greater than $10 million in potential estate taxes.

For more information about this case study, please contact John Chatmas or call (512) 693-4363.