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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

  • work Practice Area

    Estate Planning

Date & Time
  • event Date

    Wednesday, October 7, 2020

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.

$297.00
CLE
ALL

This CLE course will guide estate planning counsel on the use of grantor trusts in the new, income tax focused planning environment. Our experienced panelists will outline the benefits to clients of using grantor trusts, explain practical drafting and structuring techniques for grantor retained annuity trusts (GRATs) and intentionally defective grantor trusts (IDGTs), and help counsel avoid the mistakes and potential pitfalls of each approach.

Faculty

Nathan K. Johnson
Shareholder
Reinhart Boerner Van Deuren S.C.

Mr. Johnson's practice focuses on trusts and estates. He serves a wide range of clients including individuals, closely held businesses and charitable organizations. He is also a CPA, enabling him to recognize and create appropriate financial solutions for his clients. He also speaks on a variety of trust and estate planning topics to professional organizations.

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Mary Ann Sisco
Regional Senior Wealth Advisor
Northern Trust, Corporation

Ms. Sisco has extensive experience in providing high net worth individuals with sophisticated estate planning solutions. These solutions address gifting, business succession, retirement, executive compensation, generational and charitable planning. Prior to entering the financial services industry, she was in private practice with several well regarded estate planning firms.

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Eido M. Walny
Founder
Walny Legal Group, LLC

Mr. Walny's practice focuses on estate planning, asset protection, business succession, probate, and trust administration. His experience includes counseling to protect multi-generational family wealth, structuring family and business succession plans, non-probate transfers, and trust and probate administration. He is a frequent speaker on estate planning, charitable giving methods, and topical business issues.

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Description

For most taxpayers, estate planning should focus on minimizing income tax, while also maximizing the use of the estate tax exclusion. Estate planners should focus on the transfer of assets likely to appreciate, using vehicles that maximize the step-up in basis upon death and allow beneficiaries to avoid hefty capital gains taxes.

Grantor trusts--including GRATs and loans and sales to IDGTs--are two very effective methods for transferring assets and property that will likely appreciate in value to beneficiaries because they allow the grantor to sell or transfer assets to the trust without recognizing a gain.

A GRAT allows a grantor to transfer income producing assets into the GRAT and retain the right to fixed payments for a term of years. When the trust term ends, the remainder interest passes to the grantor's children. So long as the grantor survives the GRAT term, the amount that passes to the beneficiaries is not subject to estate tax.

Another effective technique for transferring wealth to beneficiaries is the sale or transfer of assets into an IDGT. The sale of an asset to an IDGT is not considered a gift event that would trigger gift taxes, and the sale is not considered a taxable event which would trigger any capital gains tax. Also, the sale accomplishes the removal of the asset from the taxable estate. Current low interest rates make GRATs and IDGTs advantageous at this time, but they are not without risks, including mortality risks that will result in the loss of estate tax benefits if the grantor does not outlive the terms of the trust.

Listen as our authoritative panel of estate planning counsel discusses best practices for determining which clients and assets can most benefit from GRATs and IDGTs, maximizing the tax advantages and avoiding the pitfalls associated with each technique.

Outline

  1. IDGT advantages and applications
    1. Structuring the trust
    2. Structuring the transaction
  2. Structuring GRATs
    1. Regulatory and statutory requirements
    2. Impact of low interest rates
  3. Tax consequences for GRATs and IDGTs

Benefits

The panel will review these and other key issues:

  • What are the statutory and regulatory requirements for structuring GRATs?
  • What are practical planning approaches for using GRATs and IDGTs?
  • What drafting strategies should be used in creating IDGTs?
  • How do current interest rates impact the viability of GRATs?
  • What seed money requirements should estate planning counsel consider?