Georgia Granter Retained Income Trust with Division into Trusts for Issue after Term of Years (GRITDTIATY) is a specialized type of trust that allows the granter to retain income from the trust during a specified term of years and subsequently distribute the trust assets to designated beneficiaries. This estate planning tool provides unique benefits for individuals in Georgia seeking to minimize estate taxes and transfer wealth to their beneficiaries. The primary objective of a Georgia GRITDTIATY is to reduce estate tax liability. By retaining income rights from the trust during the term of years, the granter effectively removes the value of the trust assets from their taxable estate. This can result in substantial tax savings for high net worth individuals. There are two main types of Georgia GRITDTIATY: 1. Georgia Granter Retained Annuity Trust (GREAT): In a Georgia GREAT, the granter receives a fixed annual payment (annuity) from the trust based on the initial value of the assets. At the end of the specified term, the remaining trust assets pass to the designated beneficiaries. The value of the retained annuity payment and the term of years can be tailored to achieve specific estate planning goals. 2. Georgia Granter Retained Unit rust (GUT): In a Georgia GUT, the granter receives a fixed percentage of the trust's net fair market value, recalculated annually. Like a GREAT, the remaining trust assets are distributed to the beneficiaries after the specified term. The granter has the flexibility to receive a potentially increasing income stream if the trust's value appreciates over time. The division into trusts for issue after the term of years is a crucial feature of Georgia GRITDTIATY. It allows the granter to establish separate trusts for each beneficiary, ensuring that their respective interests are protected and distributed according to their specific needs and circumstances. Georgia GRITDTIATYs involve complex legal and financial considerations, requiring the assistance of experienced estate planning professionals. The terms and conditions of the trust, including the term of years, income rights, and the division of trusts, must be carefully crafted to meet the granter's objectives while complying with Georgia state laws and regulations. In summary, Georgia Granter Retained Income Trust with Division into Trusts for Issue after Term of Years offers an effective strategy for high net worth individuals to transfer assets to their beneficiaries while minimizing estate taxes. The GREAT and GUT are two main types of trusts commonly used in Georgia. This estate planning technique requires professional guidance to ensure compliance and the achievement of desired objectives.
Georgia Grantor Retained Income Trust with Division into Trusts for Issue after Term of Years
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When a trust is irrevocable but some or all of the trust can be disbursed to or for the benefit of the individual, the look-back period applying to disbursements which could be made to or for the individual but are made to another person or persons is 36 months.
Key Takeaways. A 5 by 5 Power in Trust is a clause that lets the beneficiary make withdrawals from the trust on a yearly basis. The beneficiary can cash out $5,000 or 5% of the trust's fair market value each year, whichever is a higher amount.
Year Trust, also known as a Legacy Trust or Medicaid Asset Protection Trust, can be established to protect assets from being spent down on long term care in a nursing home. The assets you place in the Legacy Trust will become exempt from the Medicaid spend down requirements after a 5 year look back period.
Under Section 663(b) of the Internal Revenue Code, any distribution by an estate or trust within the first 65 days of the tax year can be treated as having been made on the last day of the preceding tax year.
The GA RAP effectively limits how long a trust can continue. The current safe harbor limit of 90 years is being extended to 360 years. The benefit of this change will be to enable longer term trusts that can continue to benefit an individual's family members for as long as desired.
A trust can remain open for up to 21 years after the death of anyone living at the time the trust is created, but most trusts end when the trustor dies and the assets are distributed immediately.
A dynasty trust usually is limited to about six generations. At that point the trust winds down by distributing its assets to the latest generation or other designated beneficiaries. There are many ways to fund a dynasty trust. Some people wait to have their estates transfer assets to the trust.
At the end of the initial term retained by the Grantor, if the Grantor is still living, the remainder beneficiaries (or a trust to be administered for the benefit of the remainder beneficiaries) receive $100,0000 plus all capital growth (which is the amount over and above the net income that was paid to the Grantor).
Indeed, trusts can and do end when the grantor specifies an end date or condition, and that condition is met. For example, the grantor can say that a child gets the benefit of cash in a trust until the child turns 18, or, alternatively, until the child graduates from college.
If the trust was divided into fractional shares, the trust allocation is updated by recalculating the fraction each time distributions are made, as well as each time income is allocated to principal.