Trusted Legal Resources

What are the Benefits of a Grantor Retained Annuity Trust (GRAT)?

A Grantor Retained Annuity Trust (GRAT) is an excellent option for individuals looking to transfer wealth to heirs while minimizing gift and estate tax liabilities. By establishing a GRAT, the grantor transfers assets into the trust and retains the right to receive fixed annuity payments over a set term, typically two to ten years. If the assets appreciate at a rate greater than the IRS’s assumed rate, the excess value passes to beneficiaries tax-free, providing significant savings. This strategy is particularly effective in low-interest environments or when high-growth assets are expected to appreciate substantially. One thing to be aware of however, is that if the grantor passes away during the trust term, any assets remaining in the trust might be included in their estate, which might erase some of the benefits of the GRAT. Careful planning is required to ensure that the full tax advantages apply to your estate. A

Read More »

When to Choose an Intentionally Defective Grantor Trust (IDGT)

An Intentionally Defective Grantor Trust (IDGT) is a useful tool for families and individuals who have appreciating assets, such as a family business or real estate. It allows the grantor to transfer appreciating assets, while minimizing tax exposure. By establishing an IDGT, the grantor pays income taxes on trust assets, allowing them to grow tax-free for the benefit of future generations. The unique structure significantly reduces the size of the grantor’s estate while shifting valuable assets out of it, avoiding substantial estate taxes down the line. An intentionally defective grantor trust is drafted using language that contains “intentional defects.” These are provisions that make the trust meet the definition of a revocable trust for income tax purposes, while also being considered an irrevocable trust for estate tax purposes. For a revocable trust, income is usually taxed to the grantor of the trust who is treated as the owner for tax

Read More »

Planning for the TCJA Sunset: What Do American Families Need to Know?

Many people assume that the Federal Estate Tax won’t apply to their family based on the current ceiling and the value of their assets today. This ceiling is about to be lowered however, so there are many more American families who need to sit down with their estate planning attorney and review their options. As the Tax Cuts and Jobs Act (TCJA) of 2017 approaches its sunset in January 2026, families with substantial but not necessarily ultra-wealthy estates need to start considering their estate planning strategies. Planning that takes into account the TCJA sunset is not just for the ultra-wealthy, it is also important for affluent but not ultra high net worth American families, whose assets may grow significantly due to investment returns. For instance, a $10 million estate could potentially double every decade with a 7.3% annual return, quickly exceeding future exemption limits. Planning now ensures that families can

Read More »

Get Back to Your Estate Plan!

If you are like me and like many friends and colleagues you’ve been all geared up and getting ready to get back to school. Whether you have your own children in school or grandchildren or nieces and nephews or you are sending kids off to college, it feels like September is really the time when the year begins. This serves as a reminder that summer ends all too quickly and it feels like another year has gone by and things can change quickly and life just happens. Preparing for change is a big part of what we do and planning for life’s unexpected events that just happen. We could spend our days worrying about what’s in store for us around the corner or we can take time to plan in the event of a health issue or an unexpected passing of a family member so that our wishes are followed

Read More »

Attorney Alison Farquhar Joins Estate Planning Practice at Orsi Arone Rothenberg Turner, LLP

“We are excited to welcome Alison to the firm. And we look forward to the contribution she will make to our practice.” – Rob Arone Alison Farquhar is an experienced attorney with a background in estate planning as well as estate and trust administration. Alison’s practice will encompass assisting clients with a wide of range of estate planning matters, and estate and trust administration strategies. Her experience includes drafting wills and trusts and advising and representing clients on matters of tax controversy. Alison has represented clients in Massachusetts Probate and Family Court and before the Internal Revenue Service, Massachusetts Department of Revenue, and the United States Tax Court, in matters of probate, tax controversy, and tax collections. She also has extensive experience doing tax preparation for individuals, small businesses, S-corporations, and estates and trusts. Alison received her J.D. and LL.M. in Taxation from Suffolk University Law School in 2018. She received

Read More »