Tampa Defective Grantor Trusts Attorney
There are often two main benefits to creating a trust: gaining tax advantages, and providing financial gifts to loved ones. The law creates numerous types of trusts, all of which offer unique benefits, many of which are tax-related. Choosing the best type of trust for your situation can be overwhelming. Federal tax are notoriously convoluted, and constantly changing. Creating a trust can be a useful estate planning device, while also giving you peace of mind about the future. Instead of worrying about your family’s financial future, contact David Toback, Attorney at Law. He will explain your options thoroughly so you can make a well-informed decision about this important financial matter.
One of the multitudes of trusts currently available to Tampa residents is the Defective Grantor Trust, or DGT. A DGT is an irrevocable trust, meaning that once your assets are placed into the trust, they are no longer part of your estate. Federal tax law allows you to place substantial assets into your DGT, while still retaining control over the trust assets. You can make a gift or a sale to your DGT, which adds a greatly beneficial estate tax advantage.
Impact on Income Taxes
By making a sale to your DGT, you are technically generating income, even though you are “selling” your assets to a trust of your own creation. After making the sale, you will receive a promissory note from the trust. The promissory note will guarantee a certain amount of interest payments to you. Due to the nature of the trust, you can pay the related income tax, instead of the amount being taken out of the trust. Designing the specifics of your DGT and making sales to such requires careful planning. It is important to consult with an experienced estate planning lawyer before creating your trust.
Benefits for Loved Ones
As with any trust, a DGT can provide great benefits to your loved ones. When you create your trust, you will designate beneficiaries. These people can include your children, grandchildren, other relatives, or friends. By selling assets to your DGT, you are decreasing the value of your estate. Simultaneously, you are essentially freezing the value of the assets in the trust for gift tax purposes. Estate and gift tax reductions will not only help your current financial situation, but will also aid your beneficiaries after your death.
Tampa, FL Trusts and Estates Lawyer
If you live in the Tampa region and want to learn more about the benefits of Sales to a Defective Grantor Trust, contact David Toback, Attorney at Law. He has successfully advised clients on estate planning for over 17 years. With an extensive knowledge of tax law and estate planning option, David Toback can help you make the best financial choices for your family. Are you concerned about the tax impact of your large estate? Do you want to provide trust assets for your loved ones? David Toback will work closely with you when creating your trust, and will thoroughly address your concerns during the process. Contact him today at (813) 231-6036 and schedule your initial consultation.