Many, but certainly not all, dynasty trusts
are structured as grantor trusts, where the settlor must report the trust income on his tax return and bear the tax burden.
: The ultrarich have been turning to a key tool -- the dynasty trust
-- to take advantage of the law doubling the amount that can be passed to heirs without being subject to estate and gift taxes.
(14) Many states do not follow the Murphy approach, which may or may not present a significant risk to both self-settled and third party dynasty trusts
. (15) The aforementioned states are term-of-years states, hybrid states, and opt-out states.
In this case, the decedent created dynasty trusts
benefiting her three sons and their respective families.
Morrissette's trust funded the policies, which were held in dynasty trusts
, with lump sum premiums totaling $29.9 million.
So-called "dynasty trusts
" now allow super-rich families to pass on to their heirs money and property largely free from taxes, and to do so for generations.
* Limit the duration of Generation Skipping Transfer Tax-exempt Dynasty Trusts
. The new budget plan proposes limiting the existence of a dynasty trust
, which currently can exist perpetually, to 90 years.
Freidman predicts the following proposals from the president are "more viable" options: to close "loopholes," including (1) eliminating the ability of someone who inherits an IRA or 401(k) to "stretch" the payments over his or her lifetime; and (2) curtailing the availability of sophisticated wealth transfer techniques such as grantor retained annuity trusts ("GRATs"), intentionally defective grantor trusts and dynasty trusts
.If the budget committee fails to reach an agreement, Freidman warns, Congress faces yet another choice on Jan.
* Dynasty trusts
will continue to generate interest
The 2004 repeal allowed for the creation of "dynasty trusts
," which allow for wealth to pass from generation to generation while minimizing the federal estate tax.
Also gaining traction among the wealthy, says Lapiana, are generation-skipping transfer trusts or "dynasty trusts
." Unlike a traditional irrevocable trust, a dynasty trust
distributes income to trust benefits for several generations while keeping the remaining trust assets outside of the beneficiaries' taxable estates, and thus free of the generation-skipping transfer (GST) tax.
They attended seminars covering the following topics: Tips Relating to IRS Audits of Family Limited Partnerships; Federal Tax Update; Valuations; Perpetual Dynasty Trusts
Tax Planning and Jurisdiction Selection; Trustee Missteps; Washington Tax Issues Associated with Transfers of Property; Washington Probate and Trust Law Update; Intra-Family Transactions: Lessons in Forgiveness of Debt; Tax-Efficient Disposition of Qualified Plans and IRAs; Planning with Gifts in 2012; TEDRA: A Panacea for Curing Trust and Estate Ailments; Tax Compliance for U.S.