That afternoon, Jack, Sr. returned to Jerry’s Bar. There sitting in the same spot was the same woman, he met yesterday. “Hi Sally, back for more poison I see.” She touched his hand and said, “You know I really enjoyed our talk yesterday. You are such a kind and friendly man and well my life of late has been filled with a lot of abuse.” He smelled perfume on her that he hadn’t smelled the day before and noticed a little make-up where none was yesterday. They talked some more and he discovered that she had attended Alabama, but had to leave when her dad died. She then met this guy, got pregnant, got married and pumped out about three other kids over time. There was no doubt that he had been abusive, she seemed jumpy the whole time they were in the bar. She seemed to fear that her husband would appear at any moment.
During their meeting Elmo slipped out to make a call on his cell phone. “Mr. Jenkins, your dad is talking to some women he met at Jerry’s yesterday. They’ve been talking a long time, just like yesterday.” “Keep your eyeballs peeled and see what you hear”, Jack, Jr. replied.
As she started to leave, she looked at Jack, “Same time tomorrow?” “It’s a date”, he shot back.
On their ride back to the dealership, Elmo started chatting with the Senior Mr. Jenkins. “Mr. Jenkins that looked like one nice piece of ass you was talkin’ to in there.” Jack smiled, he liked that Elmo noticed that he was talking to a younger attractive woman. “She is pretty isn’t she?” Jack, Sr. said obviously distracted in his thoughts. “Poor thing, she’s got a dirtbag for a husband who’s beating her around and calling her names”. “What’s her name?” Elmo asked matter of factly. “Sally, umm, Sally Beaudine”, Jack, Sr. responded. “She seemed nice, Mr. Jenkins.”
When Jack, Sr. arrived back at the dealership, he and Jack, Jr. hopped in a car and headed to lawyer Dobbins office to further discuss Senior’s estate plans.
At Lawyer Dobbins office, the counsellor laid out his plans for Jack, Sr. “You prepare a straight old fashioned revocable trust into which you put all your assets in that trust are two sub-trusts. The first one is the charitable lead trust into which all your real estate is to go upon your death. The second one is the family trust which will provide for Junior and his progency. We have a provision that if you die in the year 2010, the family share will become a dynasty trust which will go on for generations since there is no generation skipping tax for the year 2010 as well. As you can see this is a great benefit to your family. After the year 2010, the trust will revert to leaving everything to Junior since the Generation skipping tax would be huge as would the estate tax to some degree. We also have a new 30 year lease for the dealerships to sign with the land holding LLC which will ensure that the cash flow will be covered long term for the lead trust. This will have the effect of devaluing the dealerships to some degree. There is a mutual ten and twenty year option for both the dealerships and the land holding LLC, to terminate the lease. This allows for each party to terminate if the lease terms fall well below market or are so far above market that it is killing the dealerships.”
Jack, Sr. asked, “can I make gifts to my son until I die?” “Yes up to a Million Dollars and twelve thousand dollars per year without incurring any gift taxes. So you can make gifts up to a Million Dollars, but given the size of your estate, that’s like a grain of sand in the desert. After the year 2010, it might behoove us to look at a gift giving strategy”, the lawyer replied seriously.
At that point Jack, Sr. looked over to Jack, Jr. and asked if this made sense. Jack, Jr. said, “yes, but I am not comfortable with that Dynasty Trust. I have no wife, no children, and it kind of limits what I can do with things before I die”. Dobbins jumped in, “we can write the Dynasty Trust to give you something called a limited power of appointment in which you can appoint assets to anyone other than yourself or your estate and it will stay a dynasty trust (although that could by subsequent legislation be over-ridden)”. “But that means that I can’t just liquidate everything and blow it all on wine, women and song, you know like Dad”, he said smiling.
After listening to the exchange, Jack, Sr. sat for a moment. “Let’s do the Dynasty Trust, its only for one year, son, and I hope to live a lot longer. How long will it take to draw all this stuff up?” About a month, Dobbins responded. “Good”, let’s all get to work.