A metallic silver Aston Martin screeches to a halt in your visitor’s parking spot. Thirty-eight years old, impeccably dressed and arrogant, your client steps out, slams the car door and enters the building for an appointment with you. Years ago your firm counseled his parents on the formation of their software company. As the company started to grow, you, as a young partner, used your considerable tax expertise to transfer 98 percent of that company into a multigenerational family trust for the benefit of their son and issue. Through years of hard work by your client’s parents, and through their technical brilliance, the company flourished. In their later years, mom and dad decided to sell the software company and eventually accepted a bid for $75 million. Their young son’s trust ended up with most of that sum, after income taxes, based on your creative and detailed planning many years ago.

A driving force behind mom and dad’s decision to sell the software company was their concern that their young son did not possess the financial “discipline” to maintain the company’s viability. They followed the same thought process in designing the trust. The trust prohibits the wealthy young man from serving as a trustee. The trust also contains a spendthrift clause and a fully discretionary distribution standard (and does not contain a support standard of distribution or a mandatory distribution requirement), thus avoiding the creation of any property rights susceptible to creditor attack. Dad’s trusted brother, Uncle Harry, was appointed trustee.

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