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Case Study Transfer of Property to Lineal Descendants

Our Estate Planning experts helped our client safeguard his property for the future benefit of his children.

A couple own a property as tenants in common, split as 90% to one partner and 10% to the other. The majority owner had purchased this property prior to his relationship and, rather than include this property in the balance of his Estate, wished to separately hold it to transfer to his children after his passing. The minority owner, his wife, was supportive of this arrangement.

In most circumstances an Estate’s assets will transfer directly to a spouse upon one partner’s passing, so this arrangement required additional planning and structure.

Estate Planning Solution

When drafting the couple’s Estate Plans, the minority property owner’s Will set that her 10% share of the property would transfer directly to her husband on her passing.

In the Will of the majority property owner, our Estate Planning experts devised a strategy whereby his interest in the property would be gifted to a Lineal Descendants Testamentary Trust. His wife (if she survives her husband) would become the trustee and principal of the trust, providing her with control. She would also be nominated as an income beneficiary of this trust, along with the couple’s two children, allowing her to benefit from any income generated by the trust and allowing her to remain living in the property.

The two children – and any future direct bloodline relatives – would be capital beneficiaries of the trust, meaning that they receive the benefit of the property, or proceeds of the property if sold.

What Does This Mean for You?

Implementing a Lineal Descendants Testamentary Trust in your Estate Plan is an effective tool for protecting the legacy you wish to leave your children and direct descendants. It restricts anyone outside of your blood line relatives – including spouses, in-laws or extended family members – from laying claim to the assets within the trust.

Contact us to discuss your personal situation and Estate Planning solutions.