26, 2015 /PRNewswire/ - Transferring assets to a grantor
trust can be a powerful way to maximize an individual's lifetime gift exemption, according to Atlantic Trust , the U.
As an unfunded trust, the grantor
will normally make annual gilts to the trust so that it can pay the insurance premiums.
Although the grantor
cannot change the beneficiaries of the ILIT, the trust agreement could give the grantor
the right to cancel or modify a beneficiary's annual withdrawal rights.
As a result, subsequent creditors, purchasers, or lenders of the grantor
may assert their claims against the property.
The complex ownership arrangement designed by the grantors
in this ruling created a fragile environment for the S election, with several possible potential traps that should be anticipated and avoided.
"seeds" an IDIT with cash or property that creates a taxable gift.
Step 3: The grantors
of the trust receive income each year from each trust.
use the score to assess your default risk at a specific point in time.
organization is a public charity or private foundation; and
For comparison purposes, if the grantors
had established two 12-year QPRTs and made additional taxable gifts of $381,928 up front to the remainder trust and if such gifted funds earned six percent compounded annually, the gifted funds would have roughly doubled to $768,000, as compared to the $2.
This change presumably is aimed at the common occurrence of QPRT grantors
buying back the residence during the trust term, which allowed trust beneficiaries to receive cash instead of a residence with a low carryover income tax basis.
We are now on a par with much of the rest of the world in the services and information we can offer borrowers and credit grantors
," said Yelin.