For a Revocable Living Trust to function property, it is not enough for the Grantor (the individual who made the trust) to simply sign the trust agreement. He must fund his assets in the name of the trust. Funding refers to taking assets that are titled in the individual Grantor’s…
In his article titled Estate Planning for a Family with a Special Needs Child, Sebastian V. Grassi, Jr. lists five estate planning options for parents of a special needs child: 1. Distributing assets directly to the special needs child; 2. Disinheriting the special needs child; 3. Leaving property to another…
What is a Trust? Example: You are visiting your sister in Australia for six months and your son needs $5000 for living expenses while you are gone. You could deposit $5000 in his checking account. But what if you are concerned that he might spend it on a wall size…
In a recent article, Laura Saunders points out the advantages to a Grantor Retained Annuity Trust (GRAT). GRATs transfer asset appreciation from one taxpayer to others, virtually tax free, and the benefit can be huge. A taxpayer can set up a GRAT with a set term of two years or…
As Kelly Greene points out in her recent article in the Wall Street Journal, families are looking to take advantage of the $5 million gift tax exemption which will expire at the end of the year, but at the same time they are worried that they will change their minds…
Many people like the idea of leaving bequests to favorite charities in their wills. But instead of leaving money to a charity in your will, you can put that money into a charitable remainder trust and collect income while you are still alive. Charitable remainder trusts have many other advantages,…
The White House recently proposed changes to the rules governing Grantor Retained Annuity Trusts. These trusts pay an annuity to the grantor over the life of the trust that equals the initial value of the assets plus an interest rate established by the IRS (currently 2.4 %). The annuity is…
A Grantor Retained Annuity Trust (GRAT) is comparable to an annuity. You place funds in the annuity and receive an annual payout based on the IRS stated interest rate at the time you establish the trust. This rate is currently 2.4% When the annuity matures, any appreciation above the current…
A Bypass Trust, also known as a Credit Shelter Trust, lets a married couple double the estate tax exemption. For example, if the husband dies first, his assets fund a trust for the children up to the estate tax exemption amount (currently $5 million Federal and $4 million for Illinois).…
In a recent article in the Wall Street Journal titled, How to Fix Your Life in 2009, Eleanor Laise provides advice for individuals whose stock portfolios have been beaten down. She suggests taking advantage of the $13,000 exemption from gift taxes that one can use to give up to $13,000…