If your estate plan includes one or more trusts, review them in light of income taxes. For trusts, the income threshold is very low for triggering the: Top income tax rate of 39.6%, Top long-term capital gains rate of 20%, and Net investment income tax (NIIT) of 3.8%. The threshold is only $12,500 for 2017. 3 ways to soften the …
Irrevocable trusts can provide a variety of benefits, including gift and estate tax savings, creditor protection, and the ability to control how assets are distributed. To preserve these benefits, however, it’s critical to respect all trust formalities. Case in point Here’s an example of just how critical this can be: In U.S. v. Tingey, a taxpayer set up an irrevocable …
Many people set up a revocable, or “living,” trust to shield assets from probate and take advantage of other benefits. For the trust to work, you must transfer assets to it that would otherwise go through probate — a process known as “funding” the trust. Most people fund their trusts around the time they sign the trust documents. Once your …
What is a GRAT? There are several estate planning tools designed to assist in the transfer of assets to a trust for beneficiaries while also retaining the grantor’s right to income or use of the asset. Grantor Retained Annuity Trusts, or GRATs, have become a popular transfer technique with regards to appreciating assets or minority interest in a family …
Family limited partnerships (“FLPs”) give senior family members a tax efficient way to shift wealth to future generations while still exercising control over their assets. As an added benefit, by forming a FLP, senior family members remove assets out of their estate—generally at a reduced transfer tax value. The FLP structure consists of a general partner and limited partners who typically …