Creating a Lasting Legacy Through Trust Planning for an Extended Family
The Situation
After selling a successful family business to a Fortune 100 company, the founders experienced a significant liquidity event that created substantial wealth virtually overnight.
The family wanted to ensure that a portion of their wealth would benefit not only their children and grandchildren, but also siblings, nieces, and nephews who had played important roles throughout their lives. They were less concerned with building a traditional dynasty trust for descendants and more focused on creating meaningful financial support for their extended family.
Several family members had modest financial means, and three beneficiaries were receiving Medicaid benefits. The parents wanted to ensure these beneficiaries could benefit from family wealth without jeopardizing access to important government assistance programs.
Additionally, they wanted to avoid placing future administrative burdens on their children by requiring them to oversee distributions or serve as family "gatekeepers."
Our Strategy
Working alongside legal counsel and tax professionals, we designed and implemented a comprehensive trust structure that included:
- One large irrevocable family trust
- Three Supplemental Needs Trusts (SNTs) for beneficiaries receiving Medicaid benefits
- Fourteen total beneficiaries spanning multiple branches of the family
The trust structure was designed with a dual mandate:
Generate current income and financial support for beneficiaries during the trust term.
Preserve and grow principal for future distribution upon trust termination.
Baird Trust Company was appointed as trustee of the extended family trust, providing independent fiduciary oversight and long-term administrative continuity.
The Supplemental Needs Trusts allowed beneficiaries receiving Medicaid benefits to continue qualifying for those programs while receiving supplemental support from trust assets to improve quality of life.
To further reduce potential family friction, a directed trust structure was implemented whereby:
- Baird Trust Company served as trustee and administrator.
- Professional investment management was separately directed by our team
- Clear distribution standards were established.
- Family members were no longer required to act as intermediaries between the trust and beneficiaries.
The Outcome
The family created a durable framework capable of supporting multiple generations and multiple family branches without creating administrative burdens for future heirs.
Benefits included:
- Financial support for fourteen beneficiaries
- Preservation of Medicaid eligibility for beneficiaries receiving government assistance
- Professional trust administration through Baird Trust Company
- Independent fiduciary oversight
- Reduced family conflicts regarding distributions
- Current income generation alongside long-term capital growth
Value Delivered
The family transformed a one-time liquidity event into a thoughtful multi-generational family support strategy. By combining an irrevocable trust, Supplemental Needs Trusts, professional investment management, and independent fiduciary oversight from Baird Trust Company, they created a structure capable of supporting siblings, nieces, nephews, and future generations while preserving family harmony and long-term financial stewardship.
The scenario described is hypothetical and is intended solely to illustrate the types of financial planning services that may be provided. It does not represent the experience of any specific client. Actual client experiences and outcomes will vary depending on individual circumstances and it should not be interpreted as a guarantee of future results or client experience.