Estate Equalization Strategy

Estate Equalization Strategy

• Client Profile
  • Client owns and operates a farm or business, in which some, but not all of their children have been active.
  • Those children who have been active in the business desire to continue their involvement, after the parent(s) death.
  • Desire to provide a fair and equitable amount of assets to all children.
• Solution Opportunity
  • Calculate and project total values of farm or business, less the active children’s’ current shares of same.
  • Use permanent life insurance to offset this value, and with the non-active children as beneficiary.
  • Allows for all children to feel that the treatment is fair and equitable. Also eliminates hard feeling between children, as active children may resent non-active children having controlling or at least income-producing, interests, etc. If total estate is not otherwise sufficient, non-active children may feel short-changed by their share of the estate; possibly resulting in applications for wills variation, family problems, etc.