GRIT's, GRAT's and GRUT's: planning and policy

Article Abstract:

Congress enacted IRC 2702 as part of the Omnibus Budget Reconciliation Act of 1990 to eliminate the potential tax benefits of grantor retained income trusts (GRITs). However, the section contains exceptions for grantor retained annuity trusts (GRATs), grantor retained unitrusts (GRUTs) and GRITs in which the only asset is the personal residence of the grantor. Under IRC 2036 estate taxes apply to the GRIT corpus's entire value. To neutralize the comparative advantage given to GRATs and GRUTs, application of section 2036 should be extended to these types of trusts as well.

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Taxing offshore asset protection trusts: icing on the cake?

Article Abstract:

Income and transfer tax considerations that favor overseas asset protection trusts (OAPTs) compared to domestic asset protection trusts are contrary to sound tax policy. Tax laws should not operate to encourage taxpayers to move assets overseas to be beyond the reach of US creditors because doing so may undermine the tort system. To the extent asset protection is allowed, OAPTs should not be governed by rules more lenient than those faced by domestic trusts. Estate tax laws regarding creditor access should be interpreted to apply equally to domestic and foreign trusts.

United States, International aspects, Trusts and trustees, Trustees, Trusts (Law), Debtor and creditor, international

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A generation-shifting transfer tax

Article Abstract:

The current federal gift, estate and transfer taxes should be replaced by a flat-rate generation-shifting transfer tax and an elective integrated transfer tax with a progressive rate. The current transfer tax has become too complex and inconsistent, with many overlapping provisions, discontinuities and potential for abuse. The alternative proposed is based on the assumptions that the tax should apply to any form of property transfer between generations and that reporting of a transaction should be required only once per generation. A draft statute is included.

Planning, Generation-skipping transfer tax

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