Vermont 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. Vermont Granter Retained Annuity Trust is a specific type of trust established under Vermont state law. It is designed to allow a granter (the person creating the trust) to transfer assets while retaining an annuity payment stream for a specified period of time. This arrangement offers several potential benefits for estate planning and tax purposes. One key feature of a Vermont Granter Retained Annuity Trust (GREAT) is that the granter receives regular annuity payments during the trust's term. These payments are usually based on a fixed percentage of the initial contribution to the trust. The annuity term can be determined by the granter and is typically between two and ten years. Grants are irrevocable, meaning that once the assets are transferred, the granter cannot change or revoke the trust. At the end of the annuity term, any remaining trust assets, including any appreciation, pass on to the designated beneficiaries. Since the assets in the GREAT are excluded from the granter's estate, there can be potential estate tax savings. There are different types of Vermont Granter Retained Annuity Trust that provide variations on these basic features. Some common types include: 1. Zeroed-out GREAT: In this type of GREAT, the annuity payment is set at a level that reduces the taxable gift to zero. The goal is to transfer assets out of the estate with little to no gift tax consequences, maximizing potential estate tax savings. 2. Flip GREAT: This type of GREAT allows the initial annuity payments to be based on a fixed percentage of the trust assets' value instead of a fixed dollar amount. If the trust assets are expected to appreciate significantly, the granter can "flip" the GREAT, converting it into a different trust arrangement that benefits from this appreciation. 3. Spousal GREAT: This type of GREAT involves spouses collaborating to fund a trust to take advantage of both spousal exemption amounts. By splitting the assets and creating two Grants, each spouse can potentially reduce estate taxes further. Vermont Granter Retained Annuity Trusts offer flexibility and tax advantages, making them an attractive estate planning tool for individuals seeking to minimize their taxable estate and transfer assets to beneficiaries efficiently. However, it is essential to consult with an experienced estate planning attorney or financial advisor to understand the specific legal and tax implications of implementing a Vermont GREAT.

Vermont Granter Retained Annuity Trust is a specific type of trust established under Vermont state law. It is designed to allow a granter (the person creating the trust) to transfer assets while retaining an annuity payment stream for a specified period of time. This arrangement offers several potential benefits for estate planning and tax purposes. One key feature of a Vermont Granter Retained Annuity Trust (GREAT) is that the granter receives regular annuity payments during the trust's term. These payments are usually based on a fixed percentage of the initial contribution to the trust. The annuity term can be determined by the granter and is typically between two and ten years. Grants are irrevocable, meaning that once the assets are transferred, the granter cannot change or revoke the trust. At the end of the annuity term, any remaining trust assets, including any appreciation, pass on to the designated beneficiaries. Since the assets in the GREAT are excluded from the granter's estate, there can be potential estate tax savings. There are different types of Vermont Granter Retained Annuity Trust that provide variations on these basic features. Some common types include: 1. Zeroed-out GREAT: In this type of GREAT, the annuity payment is set at a level that reduces the taxable gift to zero. The goal is to transfer assets out of the estate with little to no gift tax consequences, maximizing potential estate tax savings. 2. Flip GREAT: This type of GREAT allows the initial annuity payments to be based on a fixed percentage of the trust assets' value instead of a fixed dollar amount. If the trust assets are expected to appreciate significantly, the granter can "flip" the GREAT, converting it into a different trust arrangement that benefits from this appreciation. 3. Spousal GREAT: This type of GREAT involves spouses collaborating to fund a trust to take advantage of both spousal exemption amounts. By splitting the assets and creating two Grants, each spouse can potentially reduce estate taxes further. Vermont Granter Retained Annuity Trusts offer flexibility and tax advantages, making them an attractive estate planning tool for individuals seeking to minimize their taxable estate and transfer assets to beneficiaries efficiently. However, it is essential to consult with an experienced estate planning attorney or financial advisor to understand the specific legal and tax implications of implementing a Vermont GREAT.