Case Study:

Client Background

A married couple with two minor children came to Rosenblum Law seeking to protect their growing real estate business and multiple properties. With a budding portfolio and a desire to ensure their children were financially secure, the couple also aimed to minimize tax liabilities and protect their assets in the event of their passing. They were particularly concerned about ensuring that their assets were properly distributed to their heirs while protecting their business interests.

Challenges

1. The couple wanted to provide for their children’s future by placing their assets, including their LLC and properties, into a trust to ensure proper distribution in the event of their passing.
2. They were concerned about minimizing tax implications to preserve the value of their real estate holdings for their heirs.
3. Careful handling of their primary residence was required to avoid triggering an acceleration clause in their mortgage, which could have been initiated if the property was quitclaimed to the LLC.

Solutions Provided

Rosenblum Law developed a comprehensive estate plan that addressed the couple’s goals while navigating the complexities of their real estate business. Here’s how we structured their plan:

1. Trust for LLC and Properties: We placed the couple’s LLC, properties, and other assets into a trust, ensuring that the distribution of assets would follow their specific wishes. By using a trust, we were able to maintain control over how the real estate business and properties were handled, safeguarding their legacy for their children.
2. Mortgage Protection Strategy: One of the key challenges was the couple’s primary residence, which had a mortgage that included an acceleration clause. If the property had been quitclaimed to the LLC, it could have triggered this clause, requiring immediate repayment of the mortgage balance. To avoid this, we carefully structured the estate plan to ensure that the home remained protected without triggering the acceleration clause. The property, along with the other assets, was named into the trust, but the mortgage terms remained intact.
3. Tax-Advantageous Planning: For tax purposes, we structured the plan to provide flexibility for the surviving spouse. Upon the death of one spouse, the surviving spouse had the option to leave the decedent’s share in trust or take it. To minimize immediate tax liabilities, we chose not to grant the surviving spouse immediate access to the decedent’s share, ensuring that the estate was structured in a way that minimized taxes while preserving the assets for future generations.

Outcome

With Rosenblum Law’s guidance, the couple now has an estate plan in place that protects their real estate business, secures their children’s future, and minimizes tax implications. The plan also ensures that their home remains safeguarded without triggering costly mortgage clauses, and their assets are distributed according to their wishes, providing financial security for their family.

Conclusion

At Rosenblum Law, we understand the unique complexities that come with estate planning for business owners and real estate investors. Our personalized approach ensures that your assets are protected, your tax burdens are minimized, and your legacy is preserved for future generations. Whether you’re building a real estate empire or simply want to secure your family’s future, our estate planning solutions are designed to meet your needs.