Creating a legacy of impact

A couple in their 70s had built a portfolio of real estate holdings, including timberland, and financial assets valued at nearly $60 million. They already had an estate plan in place, including irrevocable trusts established for the benefit of their four children and nine grandchildren. These trusts, which hold financial assets, represented about $20 million of the couple's wealth.

By creating the trusts, the couple had fully utilized their unified credits and generation-skipping transfer tax exemptions. The couple had three specific goals: to integrate their timberland holdings into their asset allocation; to minimize estate taxes without paying significant gift taxes; and to make provisions in their estate plan to support conservation issues.

An advisor assembled a team that included professionals in wealth planning, special asset management and philanthropy. The team developed a cash flow analysis of the couple's needs and timberland holdings, and a plan to maximize the timberland's yield potential. They also worked with the couple's estate planning attorney to create a series of discounted and zero-tax gifts, including qualified personal residence trusts and cascading grantor retained annuity trusts. The structures will be used to pass on the timber assets and the income they generate to family members, and our specialists administer the trusts to ensure that the plan works correctly both now and in the future.

Our philanthropic team is now working with the clients to precisely define their conservation-oriented goals — particularly their interest in sustainable forestry on a global basis — and is helping them create a private foundation to pursue that objective. Through the Bank of America global philanthropic network, we have already introduced the clients to conservation organizations. With the involvement of two grandchildren who share their commitment to the environment, the clients are beginning to map out the foundation's grantmaking strategy.

The client profiles presented are hypothetical and do not reflect specific strategies we may have developed for actual clients. They are for illustrative purposes only intended to demonstrate the capabilities of U.S. Trust. They are not intended to serve as investment advice since the availability and effectiveness of any strategy are dependent upon your individual facts and circumstances. Results will vary, and no suggestion is made about how any specific solution or strategy performed in reality. Always consult with your independent attorney, tax advisor, investment manager, and insurance agent for final recommendations and before changing or implementing any financial, tax, or estate planning strategy.