Tales From the Vault: Solving an Estate Conundrum

• 2 min read

real estate
How AMG helped one family navigate an estate-planning dilemma after Dad died.

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real estate

“Dad” was an AMG client, a well-known and highly regarded businessman. He was active in his church and a leader in his community. The business he created was iconic, and after he sold it, it continued to thrive.

He fathered two sons and a daughter. After their mother died, he remarried, leading to an estrangement with his children. They did not speak for almost 20 years. The two sons lived in the same town as their father; the sister had moved out of state.

Dad’s estate planning took on several iterations, including establishing a trust. When Dad’s second wife passed, his estate planning had favored her, her children and his church, to the exclusion of his own children. But he ultimately reconnected with his kids and updated the plan.

His trust owned two multi-family housing complexes that generated significant income that supported Dad for over 30 years.

The trust specified that when he died the real estate should pass equally to his three children. The sons were okay with receiving and managing the properties, while the daughter wanted her share in cash. This presented a dilemma: how to honor his wishes fairly and equitably for each beneficiary, short of selling both properties?

Since the housing complexes had significant equity, the solution proposed by AMG was to provide a bank loan that, through multiple steps aided by AMG, in the end allowed the sons to own the real estate through separate limited-liability companies (LLCs), while the daughter was able to receive her portion of the estate in cash. The properties now generate sufficient income to service the loan debt while providing income to the brothers.

Everyone walked away happy.

This information is for general information use only. It is not tailored to any specific situation, is not intended to be investment, tax, financial, legal, or other advice and should not be relied on as such. AMG’s opinions are subject to change without notice, and this report may not be updated to reflect changes in opinion. Forecasts, estimates, and certain other information contained herein are based on proprietary research and should not be considered investment advice or a recommendation to buy, sell or hold any particular security, strategy, or investment product.

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