St. Petersburg Grantor Retained Income Trust Attorney
A grantor retained income trust (GRIT) will allow you, as the person who created the trust, to transfer property into the trust while also receiving an income from it for a specific amount of time. Once the term of the trust is concluded, the property is then typically transferred to your beneficiaries, or your heirs. GRITs provide you with many benefits, but there are some drawbacks to them, as well. Below, our St. Petersburg grantor retained income trusts attorney explains what these are.
Benefits of a GRIT
GRITs have many benefits for you, as well as your beneficiaries. The biggest benefits you can reap are as follows:
- Reduce tax liability: Florida law does not impose an estate, inheritance, or gift tax. However, federal law does. By creating a GRIT, you can transfer property to the trust at a reduced value, minimizing the tax liabilities involved with transferring the assets. The income you receive from the trust can also be designed to reduce tax liabilities.
- Retain control: As the grantor, you can also retain control over the assets transferred during the term of the trust. This means that even though you no longer legally own the property, you can still control and manage it. This can ensure that the property is being managed according to your wishes.
- Providing a source of income: GRITs can provide you with a source of income during the term of the trust. You can structure this income to be variable or fixed, depending on your own preferences and needs.
Drawbacks of a GRIT
Although there are many benefits that GRITs offer, there are also some drawbacks and risks to think about before creating one. These include:
- Changes to tax laws: The laws regarding different types of taxes are complex, and they are also always changing. Any time there is a change in tax law, it could greatly impact your tax liability related to the transfer of property to the trust. For instance, if the exemption on the federal estate tax is reduced, you may have a substantial tax liability when you transfer assets to the trust.
- Outliving the income stream: It is critical to design the stream of income to make sure you have sufficient income to support yourself during the term of the trust. If you outlive the term of the trust, you may not have the income available when necessary.
- Unable to access transferred property: After you transfer assets to the trust, you no longer own them, nor can you control them. While you can still receive income stream payments, you cannot access the property you have transferred.
Our GRIT Attorney in St. Petersburg Can Advise You of Your Options
If you are considering creating a trust as part of your estate plan, we can help. David Toback is a St. Petersburg grantor retained income trusts attorney that has the necessary experience to help you draft your trust so it provides for you during your lifetime, and for your beneficiaries in the future. Call us now at 813-252-7529 or chat with us online to schedule a consultation and to learn more about your options.
