Estate Planning Archives | Page 3 of 4 | Wealthspire | Page: 3

Intentionally Defective Grantor Trusts (“IDGTs”) are a commonly used estate planning vehicle to transfer wealth to family members during the life of the grantor. In this White Paper we will explore the four tax types relevant to IDGTs, and the mechanics of how IDGTs work. The use of the phrase “intentionally defective” is confusing, but it simply refers to an irrevocable trust where the grantor pay the trust’s income tax bill during his or her life. What taxes relate to an IDGT? There are four types of taxes to consider: estate, gift, generation-skipping transfer (GST) and income. An IDGT allows…

Selection, Documentation, and Communication Best Practices Most of our clients put Powers of Attorney or “POAs” in place as they age. POAs are legal documents that allow you to name an “agent” (also sometimes referred to as an “Attorney-in-fact”) to act on your behalf for financial or health care decisions, and are key components of any estate plan. We believe POAs are increasingly important beyond your estate plan too. Consider the following examples: Parents of college-aged adult children need healthcare POAs to interact with doctors and be involved with their children’s health care decisions. A business associate needs a non-durable…

You can streamline the estate planning process by coming prepared to your first meeting with your estate planning attorney. It will be helpful if you have taken some time to consider who you would like to name as guardian, executor and trustee, as well as who you would generally like to inherit your property. In addition, your attorney will ask for some basic information from you in order to best advise you. Below is a list of the information and documents that we recommend you make available to your estate planning attorney. If you are married, you should provide information…

We recommend reviewing your estate plan regularly to determine whether it remains up to date - below is a checklist of some questions to revisit each year. How do I know when to update my estate plan? Who: Consider whether there have been any changes with the people in your life. Have you or your children been married or divorced? Have there been any new births? Has anyone named in your Will died or become disabled? Have you fallen out of touch with anyone named in your Will? What: Consider whether there have been any changes in your personal circumstances…

Objective The objective of the Grantor Retained Annuity Trust is to remove appreciation on the transferred assets from the grantor’s estate. The structure of the GRAT also allows this removal of appreciation to be done at minimal or no gift tax cost. Operation of the GRAT The grantor transfers an asset with high appreciation potential to the GRAT, which is an irrevocable trust. In return, the grantor retains a qualified annuity interest for a specific term of years. Common terms of years for annuity trusts range from 2 to 10 years. The initial term must be at least 2 years,…