What if you could give your children assets in a trust and they could use them and yet they’d avoid estate taxation at their death? That’s what a “Generation-Skipping Transfer” Trust, or “GST” trust does. It is a trust which is designed to avoid estate taxation at the death of the beneficiary. During the life of the beneficiary, the assets in the trust are used for their health, education, maintenance, and support. After the beneficiary’s death, the assets go to their own children. The … [Read more...] about What is a GST Trust?
As most estate planning attorneys know, if the government is thinking of closing a loophole, it probably means it is an effective strategy. Last week, I discussed the potential closing of the so-called “backdoor Roth IRA” loophole. This week, I’ll discuss “GST” exemption and dynasty trusts in broad terms (there are many technical issues beyond the scope of this blog). For the past several years, the Obama Administration has proposed having GST exemption allocation expire after 90 years, rather … [Read more...] about Another Loophole?
The Grantor Retained Annuity Trust or “GRAT” is a great vehicle which may be used to transfer a great deal of value for little or no estate, gift, or generation-skipping “cost.” Thanks to some Wal-Mart heirs’ shrewd planning, this even works if the GRAT is “zeroed-out.” Let’s take a closer look. A GRAT is a trust in which the grantor retains a right to a stream of annuity payments for a term of years. During that term, the grantor gets these payments and whatever remains goes to the remainder … [Read more...] about The Incredible Grat