Kaplin Stewart Meloff Reiter & Stein, P.C. - Philadelphia Business Attorneys 20 Twenty Years
Contact our attorneys

Creative estate planning for second marriages

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Estate Planning on Apr 22, 2016.

One of the most interesting things about estate law is the fact that no two Pennsylvania individuals or families will share the exact same set of needs when it comes to planning their estates. Estate planning is incredibly flexible and easily customizable. There are options available to suit a wide range of goals and priorities. 

Consider the example of a man who has built a successful business and is preparing to marry for the second time. He has two children, only one of which is involved in the family business. He wants to provide for both his new wife and his kids in the event of his death, but he is unsure how to balance the needs of everyone he loves. This scenario requires a careful touch, but a solution can be found in a multiple-step planning approach.

First, the man can transfer his business to the child who is involved by means of an intentional defective trust (IDT). This removes the business from the estate and ensures that it will end up where the owner intends. Best of all, the owner can retain control over the business during his lifetime and will incur no income or capital gains tax from the transfer. The child who is not a party to this transfer can be accommodated in the estate plan by being given a larger share of other assets.

Next, the man creates a qualified terminable interest property (Q-TIP) and transfers all significant assets into that vehicle. He creates a life estate for his new wife so that she will be entitled to live in the family home for the remainder of her lifetime if he should predecease her. She can also benefit from income earned from the assets held within the Q-TIP. The house and the assets will pass down to the adult children upon the death of the wife.

This layered approach meets all of the family’s estate planning needs. It incurs very little in the way of taxes, allows the man to provide for his second wife, and also ensures that his children will receive their intended inheritance. In addition, the plan allows the child who is active in the family business to retain ownership once the father has passed away. This is just one of the many ways that estate planning can be molded to fit a wide range of needs in Pennsylvania and elsewhere.

Source: naplesnews.com, “Estate planning musts“, Irv Blackman, April 20, 2016

Kaplin Stewart Meloff Reiter & Stein, P.C.

Blue Bell Office
910 Harvest Drive
Union Meeting Corporate Center
P.O. Box 3037
Blue Bell, PA 19422

Phone: 610-260-6000
Fax: 610-260-1240
Blue Bell Law Office Map

Cherry Hill Office
1800 Chapel Avenue, W.
Suite 320
Cherry Hill, NJ 08002

Phone: 856-675-1550
Fax: 856-675-1551
Cherry Hill Law Office Map

Philadelphia Office
1700 Market Street
Suite 1005
Philadelphia, PA 19103

Phone: 215-567-3120
Fax: 610-260-1240
Philadelphia Law Office Map

Kaplin Stewart Meloff Reiter & Stein, P.C. - Philadelphia Business Attorneys

Send Us An Email

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy