Avoiding the Court filing of a Will, by using a Living Trust as the primary instrument to allocate one's estate, doesn't just avoid probate costs. At the same time it gives privacy to one's wishes. Since his estate is large and allocated among his surviving spouse and a bunch of other relatives, Nils is glad to know that his designation of heirs will not be open to the public eye.
As noted earlier, Sylvia is legally entitled to be one of Nils's heirs when he dies. Under the Premarital Agreement, she gets the Washington house and a $2 million trust if Nils dies before she does (as is likely since she is younger). This obligation is reflected in Nils's Living Trust Agreement, before gifts to other heirs.
Sylvia's promised inheritance isn't just good marital relations; it's good tax planning also. It may be deducted from Nils's holdings when calculating the estate tax. So for instance if Nils's taxable estate would otherwise be $20 million but he is leaving say $3 million of it to Sylvia, the taxable estate would instead be $17 million. If the estate tax rate is 50% at the time of Nils's death, this $3 million marital deduction will save $1.5 million in taxes.
Only the house is going to Sylvia outright; the $2 million will go in trust for her, with her receiving all the income at least annually. This and other features of the trust for her (all drafted into the Living Trust Agreement) meet the requirements of the Internal Revenue Code of the estate tax marital deduction. Since the trust may be deducted from Nils's estate it will be included in Sylvia's upon her later death. Of course her estate is much smaller and might avoid taxation altogether, even with the house and the trust from Nils included. That depends on the values then, and the amounts of the estate tax exemptions (Federal and State).
Some of Nils's other heirs are to get their shares in trust as well. Gifts to young persons (like education funds for grandchildren of nieces and nephews) are naturally in trust; a ten-year-old shouldn't get money directly. It's a fair question whether young adults should inherit any significant amount outright - what effect will that have on their motivation and career plans?
Lars is no young adult, but even most of his share is to be held in trust, but not because of immaturity. If Lars gets the income from a trust he inherits from Nils, and then the trust goes on to Lars's children, it will be excluded from Lars's own taxable estate. This "generation-skipping" helps to address the growing realization that Lars himself might have a taxable estate.