California Grantor Retained Income Trust with Division into Trusts for Issue after Term of Years

• Category: Trusts - Irrevocable
• State: Multi-State
• Control #: US-0678BG
• Format: Word; Rich Text

Description

Grantor-retained income trust or GRIT is an irrevocable trust established in a written trust agreement whereby the grantor transfers assets but retains the income from or the use of these assets for a stipulated period of time. The net income is distribut California Granter Retained Income Trust with Division into Trusts for Issue after Term of Years, also known as a GREAT with Division, is a type of irrevocable trust commonly used in estate planning. This estate planning tool allows individuals to transfer assets to their beneficiaries while minimizing estate taxes. A California GREAT with Division is specifically designed to spread out the distribution of assets to beneficiaries over multiple generations. This is achieved by dividing the trust into multiple separate trusts, or sub-trusts, after a predetermined term of years. This type of trust is often used by individuals who have a high net worth and are looking to pass on their assets to future generations while reducing their estate tax liability. By utilizing a GREAT with Division, the granter can transfer assets to their beneficiaries without incurring gift tax consequences. The GREAT with Division is structured in the following way: 1. Granter: The person creating the trust, also known as the granter, transfers assets to the trust. 2. Retained Income and Distribution: The granter retains the right to receive income from the trust for a specified term of years. 3. Division into Trusts: At the end of the term, the trust is divided into separate sub-trusts, with each sub-trust designated for a specific generation of beneficiaries. 4. Distribution to Beneficiaries: Income and principal can be distributed to the beneficiaries of each sub-trust according to the terms of the trust. By dividing the trust into separate sub-trusts for each generation, the granter can take advantage of generation-skipping transfer tax exemptions, ultimately reducing the overall tax burden on the estate. Different types of California Granter Retained Income Trust with Division into Trusts for Issue after Term of Years can include the following: 1. Standard GREAT with Division: This is the basic structure mentioned above, where the trust is divided into separate sub-trusts after a term of years. 2. GREAT with Division and Tax-Exempt Remainder Trust: This type of GREAT with Division includes provisions for creating a charitable remainder trust, which can provide an additional tax benefit for the granter. 3. GREAT with Division and Family Limited Partnership: In this arrangement, the GREAT with Division is combined with a family limited partnership, allowing the granter to further protect and control family assets. In summary, a California Granter Retained Income Trust with Division into Trusts for Issue after Term of Years is an estate planning tool used to pass on assets to beneficiaries while minimizing estate taxes. By dividing the trust into separate sub-trusts after a specific term of years, this trust structure enables the granter to utilize generation-skipping transfer tax exemptions and distribute assets across multiple generations.

California Granter Retained Income Trust with Division into Trusts for Issue after Term of Years, also known as a GREAT with Division, is a type of irrevocable trust commonly used in estate planning. This estate planning tool allows individuals to transfer assets to their beneficiaries while minimizing estate taxes. A California GREAT with Division is specifically designed to spread out the distribution of assets to beneficiaries over multiple generations. This is achieved by dividing the trust into multiple separate trusts, or sub-trusts, after a predetermined term of years. This type of trust is often used by individuals who have a high net worth and are looking to pass on their assets to future generations while reducing their estate tax liability. By utilizing a GREAT with Division, the granter can transfer assets to their beneficiaries without incurring gift tax consequences. The GREAT with Division is structured in the following way: 1. Granter: The person creating the trust, also known as the granter, transfers assets to the trust. 2. Retained Income and Distribution: The granter retains the right to receive income from the trust for a specified term of years. 3. Division into Trusts: At the end of the term, the trust is divided into separate sub-trusts, with each sub-trust designated for a specific generation of beneficiaries. 4. Distribution to Beneficiaries: Income and principal can be distributed to the beneficiaries of each sub-trust according to the terms of the trust. By dividing the trust into separate sub-trusts for each generation, the granter can take advantage of generation-skipping transfer tax exemptions, ultimately reducing the overall tax burden on the estate. Different types of California Granter Retained Income Trust with Division into Trusts for Issue after Term of Years can include the following: 1. Standard GREAT with Division: This is the basic structure mentioned above, where the trust is divided into separate sub-trusts after a term of years. 2. GREAT with Division and Tax-Exempt Remainder Trust: This type of GREAT with Division includes provisions for creating a charitable remainder trust, which can provide an additional tax benefit for the granter. 3. GREAT with Division and Family Limited Partnership: In this arrangement, the GREAT with Division is combined with a family limited partnership, allowing the granter to further protect and control family assets. In summary, a California Granter Retained Income Trust with Division into Trusts for Issue after Term of Years is an estate planning tool used to pass on assets to beneficiaries while minimizing estate taxes. By dividing the trust into separate sub-trusts after a specific term of years, this trust structure enables the granter to utilize generation-skipping transfer tax exemptions and distribute assets across multiple generations.