Tag: 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.…

  • Taxes – Still Time (Not Much) to Plan

    Congress wants to lower your clients tax bill (it’s true)! For most high-net-worth clients, the best way to reduce their tax bill for 2024 is to employ one or more of the many tax-reducing techniques Congress has enacted to promote philanthropic activity. Ben Franklin said that only two things are…

  • 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 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…

  • Technical Analysis: Really?

    If you’ve studied finance in school, or read books by finance professors, you’ve probably learned that technical analysis “doesn’t work.” In one important sense, that is correct, because when it does work (and it does in the right hands), it tends to produce negative tax consequences (see the end of…