Would it be feasible to have a spouse as a named beneficiary, or the grantor only receive distributions with the consent of an adverse party in order to avoid grantor trust
During the initial trust term, a QPRT is a grantor trust
While most DAPTs are grantor trusts
, with the ING trust technique the DAPT is purposefully structured as a nongrantor trust and, therefore, becomes its own taxpayer.
While there are a number of different types of grantor trusts
, the most common is the traditional estate planning revocable trust.
The world of grantor trusts
gives rise to a wide variety of options for the estate planner, including those grantor trusts
labeled GRITs, GRATs, GRUTs, QPRTs, ILITs, and IDGTs.
Proposals in President Obama's 2013 budget plan are targeting the grantor trust
, which is a widely used estate planning technique that can result in considerable tax savings for the grantor and the trust beneficiaries.
The Tax Court cited Revenue Ruling 92-73, which holds that a traditional IRA is not a grantor trust
eligible to be considered an S corporation shareholder because, unlike a grantor trust
, its income is not currently taxed to the beneficiary.
Second, not all grantor trusts
are included in the grantor's estate.
THE GRANTOR TRUST
RULES of Internal Revenue Code Section 671-679 offer some interesting planning opportunities.
2) Alternatively, the grantor can create a grantor retained annuity trust (GRAT), a grantor retained unitrust (GRUT), or a qualified personal residence trust (QPRT), all of which are grantor trusts
Therefore, a "proper" defective grantor trust
eliminates this gift tax on those income tax payments because the grantor is obligated to pay that income tax (without the right to be reimbursed).
A grantor trust
is generally used when planning a person's will and distribution of an estate.
The 2001-1 transaction marks the third time that AHFC has utilized an owner trust, having issued six grantor trusts
prior to the 1999-1 transaction.
Therefore, distributions from foreign grantor trusts
will not be taxable to the beneficiary because all income is taxed to the owner.
The law firm determined that there was a significant risk that the trusts would be grantor trusts
(1) under Sec.