Beyond the basic SUPERFREEZE - an update and additional planning opportunities

Article Abstract:

IRS rulings continue to support the advantages of using income tax defective trusts as estate freezes, and additional freeze techniques offer estate planners additional flexibility in structuring intra-family transfers for their clients. Income tax defective trusts are structured so that the grantor is treated as the owner for income tax purposes but the trust is excluded from the grantor's estate upon death. The trusts offer valuation discounts and asset protection as well. The two new types of freezes discussed operate by transferring property to the trust in exchange for a private annuity or a self-cancelling installment note.

Grantor trusts

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Beyond Chapter 14 - a tale of two (new) freezes

Article Abstract:

The enactment of Chapter 14 of the Omnibus Budget Reconciliation Act of 1990 resulted in the extinguishment of many traditional estate freeze planning techniques while giving taxpayers more exact rules and limitations to work with. The new rules are complicated, contain special limitations of actions and are less effective than traditional estate freeze techniques. Two ways to circumvent the new rules are the SUPERFREEZE, which is a sale by installment to a trust that is income tax defective, and the DOUBLEFREEZE, which adds a preferred interest entity freeze.

Laws, regulations and rules

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How well do QPRTs really work?

Article Abstract:

Qualified personal residence trusts (QPRTs) are irrevocable trusts used for family planning and tax savings which allow grantors the use of the transferred residences. Economic analysis results in the conclusion that QPRTs are not as efficient for tax savings as advocates have claimed. However, they remain useful planning tools for many persons and situations.

United States, Finance, Housing, Dwellings, Trusts and trustees, Trustees, Trusts (Law)

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