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Case Study Facts:

-two kids 14 and 9 years old

-Husband, Jaylen has 128k of life insurance and Wife, Avery has 50k of life insurance

ESTATE PLANNING INFORMATION Wills were last completed five years ago. They live in a common-law state. Jaylens will leaves everything to Avery conditioned on a six-month survivorship clauseotherwise, equally in separate trusts for the two children. Averys will is identical to Jaylens, leaving everything to Jaylen as long as he survives her by at least six months. Otherwise, a trust for the children will hold their assets

ASSETS1 Liquid assets Joint checking account $2,500 Joint savings account 5,000 Total liquid assets $7,500 Investments Averys IRA $85,000 Jaylens IRA 105,000 Troy Metals Inc. 250,000 Total investments $440,000 Use Assets Residence1 $330,000 Personal property 55,000 Vehicles 25,000 Total use assets $410,000 Total assets $857,500 Liabilities Credit cards2 $8,000 Mortgage on residence3 60,000 Auto loan4 3,000 Total liabilities $71,000 Net worth $786,500 Total liabilities and net worth $857,500

Case Question:

The Jacksons want to establish a trust to provide for their children in case of their premature death. Which of the following would you recommend as the most appropriate trust given the Jacksons overall situation and objectives? Provide a rationale for your answer.

1. an irrevocable life insurance trust granting Crummey powers to the children
2. a grantor retained income trust (GRIT) with Ashanti and Blake named as beneficiaries
3. a revocable living trust naming a third party as successor trustee, with Avery and Jaylen as the primary beneficiaries while living and the children listed as remainder beneficiaries
4. a revocable living trust naming the children as beneficiaries and Jaylen and Avery as the trustees

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