Every practitioner in every discipline has heard this complaint about a grantor trust, and likely we will all hear more of it: grantor trusts have become the foundation of most modern estate plans. One of the many “benefits” of grantor trusts is that the settlor creating the trust pays the income tax on income earned inside the trust. That is a great way to accelerate the growth of trust assets and continue to reduce the creator’s estate. But, as with so many things, too much of a “good thing” can grow old.
At some point, the cost of paying that income tax is just too burdensome, and people want out. What options exist to mollify the growing discomfort of bearing the tax cost on trust income? One obvious option is to turn off the grantor trust status so that the grantor who created the trust can stop paying the income tax. But that can be complicated—and may not even be possible. Can a trustee take action to do so? Even if it is possible, there may be adverse tax consequences to turning off grantor trust status. What other options and issues exist? Join us for a practical discussion of this common issue that will assuredly come up more frequently in future years.
This is the first of a monthly webinar series, Estate Planning: Common Issues, Practical Answers. We’ll provide a practical discussion of real planning issues that financial advisers, attorneys, CPAs, and others in estate planning professions see. This discussion will be informal and focus on presenting practical solutions.
Learning Objectives:
Shenkman Law
Dual Practitioner, Financial Planner
shenkman@shenkmanlaw.com
(201) 845-8400
Martin M. Shenkman, CPA, MBA, PFS, AEP (distinguished), JD, is an attorney in private practice in Fort Lee, New Jersey, and New York City, New York, with Shenkman Law. His practice focuses on estate and tax planning as well as planning for closely-held businesses and estate administration. Throughout his career, Mr. Shenkman received awards and acknowledgments from the New Jersey Bar Association, Worth Magazine, CPA Magazine, the American Cancer Society, and the AICPA. Mr. Shenkman holds a Bachelor of Science from the Wharton School at the University of Pennsylvania, an MBA from the University of Michigan, a law degree from Fordham University School of Law. He is admitted to the bar in New York, New Jersey, and Washington D.C.
SAX LLP
Partner
jmatak@saxllp.com
(973) 472-6250 ext. 6137
Joy Matak, JD, LLM, leads the firm’s Trust and Estate Practice. Joy has more than 20 years of diversified experience as a wealth transfer strategist with an extensive background in recommending and implementing practical tax strategies to accomplish estate and business succession goals. She also performs tax compliance, including gift tax, estate tax, and income tax returns for trusts and estates. Joy Matak holds her Masters of Laws in Taxation from Georgetown University and is admitted to the bar in New Jersey.
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