Category: Trusts

  • Avoid These Top Ten Mistakes in Delaware Statutory Trusts

    Delaware Statutory Trusts (often called “DST” but don’t confuse that with “deferred sales trust”) can be good solutions for certain very specific real estate tax planning purposes. How do you know if a Delaware Statutory Trust is right for your client’s situation? Consider Mark who owns $2 million of apartments in California.…

  • Income Accounting for Tax-Exempt Trusts

    Section 664 of the Internal Revenue Code includes the rules for income paid from trusts that are tax exempt under the section. These rules are the so-called four-tier accounting system. This system lays out the basic rules for how distributions to the taxable beneficiaries of a tax-exempt asset diversification trust or…

  • Taxation of Complex Trusts

    A complex trust is any trust that does not meet the conditions to be a simple trust. Simple TrustsA simple trust is a trust that must distribute all its income in the same year it receives the income. A simple trust cannot accumulate income, cannot distribute out of corpus (also called principal), and it…

  • Escaping the Generation-Skipping Tax Trap

    Do you have any clients who might get tripped up by the generation-skipping tax? If you do, or aren’t sure, please read on. The generation-skipping tax is an estate tax on steroids. It is essentially a double tax. Generation-skipping tax is imposed on gifts or other non-exempt transfers (the rules…

  • Grantor Trusts: What Good Are They?

    If you are not sure what grantor trusts are, or when they might be used, this article is for you. We’ll discuss what grantor trusts are, their most common uses, and how they can be used to help people avoid or minimize estate and gift taxes. For most purposes, the…

  • Trusts Part 3: SLATs and Asset Diversification Trusts, A Match Made in Heaven?

    The scheduled sunsetting of the $14 million lifetime estate tax exemption presents a dilemma for some planners and clients. The dilemma is that many people with estates that will be taxable (when and if the $14 million exemption sunsets) are not comfortable giving away a large part of their wealth.…

  • Trusts Part 2: Revocable Trust for Non-Taxable Estates

    You’ve probably heard of revocable living trusts, but do you know their history, or how they can be used to help clients avoid the Secure Act? In this post, we’ll walk you through a brief history of revocable trusts, advantages and disadvantages of revocable living trusts, and how such trusts…

  • Trusts Part 1: How Did Trusts Originate?

    You’re probably quite familiar with trusts in your financial practice – but have you ever stopped to think about the origins of this financial instrument? Why do trusts exist, and why are they used? In this post – the first of a series of posts on trusts – we’ll examine…

  • Big News on IRA and 401(k) Distributions at Death

    Due to the IRS’ new regulations, your clients may be hit with a huge tax bill they didn’t expect. If you plan correctly, you have the opportunity to help clients avoid a massive tax hit. That’s because the IRS just issued final regulations about required minimum distributions. The News in…

  • Estate Exemption: Hidden AUM Opportunities

    The lifetime estate tax exemption now is about $13.6 million for an individual and $27.2 million for a couple. Under current law, the exemption is scheduled to drop, about in half, on January 1, 2026. The new exemptions[1] will be about $7 million for an individual and about $14 million…