Private Client Services

Creating a grantor retained annuity trust (commonly referred to as a “GRAT”) is a relatively simple way to transfer property to your children at virtually no gift tax cost. In order for a GRAT to be successful, your retained annuity from the GRAT must increase in value greater than a hurdle rate. The hurdle rate is linked to the market yield on U.S. government-issued debt, which is largely determined by the Federal Reserve’s monetary policy. The hurdle rate for June 2020 has dropped to 0.6%, which is a new all-time low. Thus a super low interest rate combined with the…
On April 23, 2020, the IRS issued FAQs regarding “COVID-19 Relief for Estate and Gift” in response to issues raised by the extension of time granted to taxpayers to fulfill their estate, gift and generation-skipping transfer (GST) tax obligations.  The FAQs address: (1) due dates related to Form 706; (2) allocation of GST exemption; and (3) other miscellaneous items, like qualified disclaimers and refunds, among others. (1) Form 706 Due Dates The FAQs address due dates related to filing Form 706.  For example, if Form 706 and payment of estate tax are due on May 15, 2020, the FAQs explain…
Funding Revocable (Living) Trusts Many of your clients’ estate plans consist of “pour over” Wills into revocable living trusts.  Many of these revocable trusts are unfunded which means a Will would still need to be probated in court when an individual dies. However, Probate or Surrogate’s Courts in many states are shut down. Even if they reopen soon, it could take months to probate a Will due to the backlog. Without probate, your client’s family will not be able to access the deceased’s accounts. Therefore, you may want to suggest to your clients that they fund their revocable trusts now.…
As a result of the Federal Reserve Bank’s recent stimulus and interest rate decreases in response to the coronavirus, intra-family loans can be used to transfer wealth to future generations with no gift tax consequences as well as to renegotiate existing intra-family loans at reduced interest rates. An intra-family loan is a basic estate-planning technique which has a very low transaction cost. Uncertainty around coronavirus and continued decreases in the market highlight the effectiveness of this simple tool and corresponding wealth-transfer. Under rules set forth in the Internal Revenue Code, it is possible to make loans to family members at…