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Why Setting Goals Is Necessary in your Business Plan

May 16, 2018

Every successful company starts with a good idea. These ideas are expressed in goals that you set and carry out on paper. Your business plan is the document that you need to get started. See how important it is to develop this plan correctly and using the help of a legal professional. Define Goals in… Read more »

Can I Buy the House Back From the Trust After it Ends So That My Kids Can Still Get the Capital Gains Benefit?

September 01, 2017

A QPRT may allow for the sale of the residence during its term. In addition, the trustee of the QPRT may hold the sales proceeds as long as the proceeds are held in a separate account. However, the residence may not be sold to the grantor, the grantor’s spouse, or any entity controlled by the… Read more »

What if I Survive the Trust Term?

August 30, 2017

If you are still living at the end of the term, you will have accomplished the goals of this planning strategy. Your children in our example (or trusts for their benefit) are now the owners of the house. However, you do not have to move out. To assure that you have a place to live,… Read more »

Are There Any Disadvantages to a Qualified Personal Residence Trust?

August 28, 2017

If you live to the end of the specified period, the residence, including all post-gift appreciation, passes to the children free of any additional federal estate or gift taxes. However, one disadvantage is that if you die before the end of the period, the value of the residence, as of the date of death, will… Read more »

What is a Qualified Personal Residence Trust and How Does it Work

August 24, 2017

A QPRT is a trust that holds a personal residence for a term of years, allowing you, in effect, to give away your residence at a discount and “freeze” its value for federal estate tax purposes—all while continuing to live in it. A Qualified Personal Residence Trust takes advantage of certain provisions of federal law… Read more »

Are There Non-Tax Reasons to Use a Dynasty Trust?

August 22, 2017

The non-tax reasons for creating the dynasty trust vary depending upon the needs and desires of the trustmaker. Dynasty trusts can be created to provide creditor and “predator” protection for the beneficiaries of the trust, generation after generation. They can shield against divorce proceedings initiated against a beneficiary of the trust, or creditors of a… Read more »

What is a Dynasty Trust?

August 18, 2017

You can utilize your Generation Skipping Transfer (GST) Tax exemption to plan for several generations and build enormous wealth. This type of planning is known as dynasty planning. One of the reasons Congress enacted the GST Tax is to curb the wealth-building effects of dynasty planning. The concept of dynasty planning is to pass the… Read more »

What is a Grantor Deemed Owner Trust?

August 16, 2017

A Grantor Deemed Owner Trust (GDOT) is an irrevocable trust that is treated differently for federal income tax purposes than for federal estate tax purposes. For estate tax purposes, any gifts you make to the GDOT will be treated as completed gifts, meaning the gifts are excluded from your taxable estate (just like the ILIT)…. Read more »

I’ve Created an Irrevocable Trust and am Interested in Gifting Annual Exclusion Amounts to Decrease my Taxable Estate, but I am Gifting in Disproportional Amounts for Each of the Children’s Families. Isn’t This Giving Unequal Amount to My Children?

August 14, 2017

No, contributions into an Irrevocable Trust do not determine the ultimate ownership of the property contributed. The distribution clause in the Trust controls the ultimate disposition. For example, you have two children, and you intend for them to be equal beneficiaries of your trust after your death. One child has two children and the other… Read more »

Can the Irrevocable Life Insurance Trust Last Forever

August 10, 2017

Depending upon state law, a life insurance trust can last as long as any other trust, including dynasty trusts. If the ILIT is a dynasty-type ILIT, it will be subject to generation-skipping transfer taxes as discussed in Chapter 4. However, your generation skipping transfer tax exemption can be applied against the amount contributed to the… Read more »

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