Louisiana Grantor Retained Annuity Trust

• Category: Trusts - Misc.
• State: Multi-State
• Control #: US-13197BG
• Format: Word; Rich Text

Description

This form is used for a grantor retained annuity trust. Louisiana Granter Retained Annuity Trust (GREAT) is a legal instrument used in estate planning that allows individuals to transfer assets to an irrevocable trust while retaining a fixed annuity payout for a specified period. This trust arrangement offers several benefits including potential estate tax reduction, asset protection, and wealth transfer planning. In Louisiana, there are multiple types of Granter Retained Annuity Trusts, including: 1. Traditional GREAT: A traditional Louisiana GREAT allows the granter to transfer assets into the trust and receive an annual fixed annuity payment. At the end of the trust term, any remaining assets pass to the designated beneficiaries. The value of the taxable gift is determined by subtracting the retained annuity interest from the fair market value of the assets transferred. 2. Zeroed-Out GREAT: A zeroed-out GREAT is specifically designed to minimize or eliminate potential gift tax by addressing the possibility that the retained annuity interest could have little to no value. This is achieved by setting the annuity payout equal to the present value of the assets transferred, resulting in a gift tax value of zero. 3. Flip GREAT: A flip GREAT is a variation of the traditional GREAT that provides the granter with the flexibility to "flip" the trust into a different type of trust during its term. By initially funding the GREAT with assets expected to appreciate significantly, if the assets do appreciate, the granter can flip the GREAT into a trust such as an Intentionally Defective Irrevocable Trust (EDIT), which allows further tax benefits. 4. Spousal GREAT: This type of trust is established by a married couple, where one spouse acts as the granter, and the other spouse is the beneficiary. Spousal Grants can provide the grantor-spouse with an income stream for a fixed period while still minimizing potential estate taxes by transferring assets to the ultimate beneficiaries. 5. Personal Residence GREAT: A Personal Residence GREAT, commonly known as a "PRT," allows the granter to transfer a personal residence or vacation home into the trust while retaining the right to live in the property for a fixed number of years. At the end of the trust term, the property passes to the designated beneficiaries, potentially reducing estate taxes. Seeking professional advice from an experienced estate planner or attorney knowledgeable in Louisiana-specific trust laws is crucial when considering any type of Granter Retained Annuity Trust. These professionals can provide personalized guidance based on individual circumstances to ensure effective wealth preservation and estate planning strategies for Louisiana residents.

Louisiana Granter Retained Annuity Trust (GREAT) is a legal instrument used in estate planning that allows individuals to transfer assets to an irrevocable trust while retaining a fixed annuity payout for a specified period. This trust arrangement offers several benefits including potential estate tax reduction, asset protection, and wealth transfer planning. In Louisiana, there are multiple types of Granter Retained Annuity Trusts, including: 1. Traditional GREAT: A traditional Louisiana GREAT allows the granter to transfer assets into the trust and receive an annual fixed annuity payment. At the end of the trust term, any remaining assets pass to the designated beneficiaries. The value of the taxable gift is determined by subtracting the retained annuity interest from the fair market value of the assets transferred. 2. Zeroed-Out GREAT: A zeroed-out GREAT is specifically designed to minimize or eliminate potential gift tax by addressing the possibility that the retained annuity interest could have little to no value. This is achieved by setting the annuity payout equal to the present value of the assets transferred, resulting in a gift tax value of zero. 3. Flip GREAT: A flip GREAT is a variation of the traditional GREAT that provides the granter with the flexibility to "flip" the trust into a different type of trust during its term. By initially funding the GREAT with assets expected to appreciate significantly, if the assets do appreciate, the granter can flip the GREAT into a trust such as an Intentionally Defective Irrevocable Trust (EDIT), which allows further tax benefits. 4. Spousal GREAT: This type of trust is established by a married couple, where one spouse acts as the granter, and the other spouse is the beneficiary. Spousal Grants can provide the grantor-spouse with an income stream for a fixed period while still minimizing potential estate taxes by transferring assets to the ultimate beneficiaries. 5. Personal Residence GREAT: A Personal Residence GREAT, commonly known as a "PRT," allows the granter to transfer a personal residence or vacation home into the trust while retaining the right to live in the property for a fixed number of years. At the end of the trust term, the property passes to the designated beneficiaries, potentially reducing estate taxes. Seeking professional advice from an experienced estate planner or attorney knowledgeable in Louisiana-specific trust laws is crucial when considering any type of Granter Retained Annuity Trust. These professionals can provide personalized guidance based on individual circumstances to ensure effective wealth preservation and estate planning strategies for Louisiana residents.