Ohio 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. Ohio Granter Retained Annuity Trust (GREAT) is a legal entity in Ohio that allows a granter to transfer assets to a trust while retaining an annuity payment for a fixed period. It is an effective estate planning tool that enables individuals to minimize estate taxes while providing potential gift tax benefits. A typical Ohio GREAT involves a granter who funds the trust with assets, such as securities, real estate, or business interests while retaining the right to receive a fixed annuity payment annually for a predetermined term. These annuity payments can be set up for a specific number of years or for the duration of the granter's life. At the end of the annuity term or upon the granter's passing, the remaining trust assets, if any, pass to the named beneficiaries, typically family members or other loved ones. By establishing an Ohio GREAT, the granter may potentially reduce estate taxes. This is achieved as the taxable gift is calculated by subtracting the present value of the retained annuity interest from the total value of assets transferred to the trust. Consequently, if the assets' growth during the trust term exceeds the IRS Section 7520 rate, the excess appreciation can pass to the beneficiaries without triggering additional gift tax liability. Thus, Ohio Grants can be an excellent strategy for transferring wealth to the next generation with minimal tax consequences. While the Ohio GREAT is a general term, there are different factors to consider when tailoring it to individual needs. Some common variations include: 1. Zeroed-out GREAT: With this type of GREAT, the annuity payments are set in a manner to precisely consume the value of the assets transferred to the trust, resulting in a near-zero or nominal taxable gift. The goal is to maximize the potential tax benefits while retaining control over the assets. 2. Rolling GREAT: In a rolling GREAT, a series of Grants are set up, one after another, with each GREAT commencing after the expiration of the previous term. This strategy can potentially amplify the tax-saving benefits by allowing the granter to continue transferring assets with minimal gift tax implications. 3. Charitable GREAT: This type of GREAT incorporates a charitable beneficiary alongside the non-charitable beneficiaries. It allows the granter to support a charitable cause while enjoying potential income tax deductions and reducing the taxable gift value. In summary, an Ohio Granter Retained Annuity Trust (GREAT) is a versatile estate planning tool that offers significant tax advantages. Whether it is a zeroed-out GREAT, rolling GREAT, or charitable GREAT, each type can be tailored to meet specific objectives. Consulting with a qualified attorney or financial advisor is recommended to determine the most suitable Ohio GREAT strategy for individual circumstances.

Ohio Granter Retained Annuity Trust (GREAT) is a legal entity in Ohio that allows a granter to transfer assets to a trust while retaining an annuity payment for a fixed period. It is an effective estate planning tool that enables individuals to minimize estate taxes while providing potential gift tax benefits. A typical Ohio GREAT involves a granter who funds the trust with assets, such as securities, real estate, or business interests while retaining the right to receive a fixed annuity payment annually for a predetermined term. These annuity payments can be set up for a specific number of years or for the duration of the granter's life. At the end of the annuity term or upon the granter's passing, the remaining trust assets, if any, pass to the named beneficiaries, typically family members or other loved ones. By establishing an Ohio GREAT, the granter may potentially reduce estate taxes. This is achieved as the taxable gift is calculated by subtracting the present value of the retained annuity interest from the total value of assets transferred to the trust. Consequently, if the assets' growth during the trust term exceeds the IRS Section 7520 rate, the excess appreciation can pass to the beneficiaries without triggering additional gift tax liability. Thus, Ohio Grants can be an excellent strategy for transferring wealth to the next generation with minimal tax consequences. While the Ohio GREAT is a general term, there are different factors to consider when tailoring it to individual needs. Some common variations include: 1. Zeroed-out GREAT: With this type of GREAT, the annuity payments are set in a manner to precisely consume the value of the assets transferred to the trust, resulting in a near-zero or nominal taxable gift. The goal is to maximize the potential tax benefits while retaining control over the assets. 2. Rolling GREAT: In a rolling GREAT, a series of Grants are set up, one after another, with each GREAT commencing after the expiration of the previous term. This strategy can potentially amplify the tax-saving benefits by allowing the granter to continue transferring assets with minimal gift tax implications. 3. Charitable GREAT: This type of GREAT incorporates a charitable beneficiary alongside the non-charitable beneficiaries. It allows the granter to support a charitable cause while enjoying potential income tax deductions and reducing the taxable gift value. In summary, an Ohio Granter Retained Annuity Trust (GREAT) is a versatile estate planning tool that offers significant tax advantages. Whether it is a zeroed-out GREAT, rolling GREAT, or charitable GREAT, each type can be tailored to meet specific objectives. Consulting with a qualified attorney or financial advisor is recommended to determine the most suitable Ohio GREAT strategy for individual circumstances.