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. Jaylen’s will leaves everything to Avery conditioned on a six-month survivorship clause—otherwise, equally in separate trusts for the two children. Avery’s will is identical to Jaylen’s, 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 Avery’s IRA $85,000 

Jaylen’s 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