New Mexico 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 A New Mexico Granter Retained Income Trust with Division into Trusts for Issue after Term of Years, also known as a GREAT with Division, is an estate planning tool used in New Mexico that allows individuals to transfer assets while also retaining an income stream. This type of trust is useful for individuals who want to minimize estate taxes and transfer wealth to their beneficiaries. In a GREAT with Division, the Granter (the person creating the trust) transfers assets into the trust and retains the right to receive income from those assets for a specified period of time, usually a term of years. At the end of the term, the assets in the trust are divided into separate trusts for the benefit of the beneficiaries. One of the key benefits of a New Mexico GREAT with Division is that, if structured properly, the value of the assets transferred to the beneficiaries can be significantly reduced for estate tax purposes. This is because the value of the retained income interest is subtracted from the value of the assets in the trust when determining the taxable estate. There are two main types of New Mexico Grants with Division: 1. Standard GREAT with Division: In this type of GREAT, the Granter retains an income interest for a specified term of years and at the end of the term, the remaining assets in the trust are divided into separate trusts for the beneficiaries. The income interest retained by the Granter is typically paid out as an annuity or a fixed percentage of the initial fair market value of the assets. 2. Flip GREAT with Division: This type of GREAT with Division allows the Granter to "flip" the trust from a Granter Retained Annuity Trust (GREAT) to a Dynasty Trust or a Generation-Skipping Trust (GST) at a predetermined triggering event, such as a significant increase in the value of the assets. This can be advantageous for individuals who anticipate a substantial appreciation in the value of their assets. Overall, a New Mexico Granter Retained Income Trust with Division into Trusts for Issue after Term of Years is a sophisticated estate planning tool that can provide significant tax and asset transfer benefits. It is important to work with an experienced estate planning attorney to ensure that the trust is properly structured and customized to suit individual needs and goals.

A New Mexico Granter Retained Income Trust with Division into Trusts for Issue after Term of Years, also known as a GREAT with Division, is an estate planning tool used in New Mexico that allows individuals to transfer assets while also retaining an income stream. This type of trust is useful for individuals who want to minimize estate taxes and transfer wealth to their beneficiaries. In a GREAT with Division, the Granter (the person creating the trust) transfers assets into the trust and retains the right to receive income from those assets for a specified period of time, usually a term of years. At the end of the term, the assets in the trust are divided into separate trusts for the benefit of the beneficiaries. One of the key benefits of a New Mexico GREAT with Division is that, if structured properly, the value of the assets transferred to the beneficiaries can be significantly reduced for estate tax purposes. This is because the value of the retained income interest is subtracted from the value of the assets in the trust when determining the taxable estate. There are two main types of New Mexico Grants with Division: 1. Standard GREAT with Division: In this type of GREAT, the Granter retains an income interest for a specified term of years and at the end of the term, the remaining assets in the trust are divided into separate trusts for the beneficiaries. The income interest retained by the Granter is typically paid out as an annuity or a fixed percentage of the initial fair market value of the assets. 2. Flip GREAT with Division: This type of GREAT with Division allows the Granter to "flip" the trust from a Granter Retained Annuity Trust (GREAT) to a Dynasty Trust or a Generation-Skipping Trust (GST) at a predetermined triggering event, such as a significant increase in the value of the assets. This can be advantageous for individuals who anticipate a substantial appreciation in the value of their assets. Overall, a New Mexico Granter Retained Income Trust with Division into Trusts for Issue after Term of Years is a sophisticated estate planning tool that can provide significant tax and asset transfer benefits. It is important to work with an experienced estate planning attorney to ensure that the trust is properly structured and customized to suit individual needs and goals.