Below is a brief glance at what you’ll find in the September/October 2013 issue.
Link to the issue: September/October 2013
The GRAT: A limited time offer?
The grantor retained annuity trust (GRAT) has long been a popular tool for transferring wealth while minimizing or even eliminating gift and estate taxes. GRATs are particularly effective when interest rates are low, as they are now. But Congress may soon reduce their firepower, so now may be the time to include one or more GRATs as part of an estate planning arsenal. This article explains how GRATs work and notes proposed tax changes that would limit their benefits. A sidebar offers an example of a GRAT in action.
Avoid probate to keep your estate private
Circumventing the probate process is usually a good idea, because its public nature can lead to family disputes over asset distribution. But it’s possible to keep much (or even all) of an estate out of the probate process (and the public eye) by using the right estate planning techniques. This article describes several tools to avoid (or minimize) probate, but explains that, for larger, more complicated estates, a living trust (also commonly called a “revocable” trust) generally is the most effective tool.
International relations: Estate planning for noncitizens
For U.S. citizens, the federal gift and estate tax rules are relatively straightforward: Citizens are subject to U.S. transfer taxes on their worldwide assets. They’re also entitled to a generous lifetime gift and estate tax exemption, an annual gift tax exclusion, and a marital deduction that allows spouses to transfer unlimited amounts of property to each other tax-free. For noncitizens, however, it’s more complicated. If a significant amount of their wealth is situated in the United States, their heirs may be facing a substantial estate tax bill. This article discusses the determination of situs and eligibility for the marital deduction and looks at options to minimize adverse tax consequences.
Estate Planning Red Flag: You don’t have the right succession plan for your family business
This issue’s “Estate Planning Red Flag” discusses the situation of “Dave,” whose estate plan leaves his business to his wife and then to their son after her death. This article explains why this plan will likely lead to an enormous estate tax bill down the road, and shows how Dave might do things differently.
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