Balancing Ambition with Multi-Generational Wealth
A partner-level artificial intelligence engineer at a large technology company in the Seattle area came to us with his wife, who is not a United States citizen. Both are first-generation immigrants, and they have two adult children. Their net worth is roughly $40 million: about $30 million in investments, much of it a single low basis position in his employer’s stock, and about $10 million in rental property spread across several states. They reached financial independence years ago, and he keeps working out of a passion for artificial intelligence. They expect to spend about $10 million in their lifetimes and want the rest, roughly $30 million, to reach their children.
Their Goal Was Simple. Their Situation Was Not.
One Plan, Not Four Separate Solutions
We built one plan rather than four separate solutions.
01
We sold the higher basis shares and diversified the proceeds, while holding the lowest basis shares inside the estate, where Washington’s community property rules can allow the basis to reset when the first spouse dies. The shares that would cost the most to sell became the most efficient part of the transfer.
02
Four million dollars of deferred compensation was laddered over 15 years in a conservative 65/35 allocation, so the family’s spending is funded by a predictable stream rather than by selling stock.
03
Working with their attorney, we funded two spousal lifetime access trusts with about $20 million across consecutive tax years, invested for long-term growth under a health, education, maintenance, and support standard, with the children’s access beginning at age 35.
04
We began annual conversions of pre-tax retirement money the family does not expect to spend, moving it toward the part of the plan intended for the children, and we hold the brokerage and cash accounts in a revocable living trust that becomes an irrevocable credit shelter trust when the first spouse dies, at which point the stepped-up assets can be gifted.
05
The properties follow a multi-year path rather than a single sale and a single large tax bill. They are exchanged into Delaware Statutory Trusts, which removes the landlord work, and then, after the required holding period, into an UPREIT, which keeps institutional real estate income and is far simpler to divide among heirs.
One Plan Instead of Five Separate Ones
What the family values most is knowing that what they built will reach their children in the form they intended.
