The King Washington Qualifying Subchapter-S Revocable Trust Agreement is a legal document that outlines the terms and conditions for the establishment and management of a revocable trust under Subchapter S of the Internal Revenue Code (IRC). This agreement offers individuals, particularly in the United States, a tax-efficient strategy for estate planning and asset protection. The purpose of the King Washington Qualifying Subchapter-S Revocable Trust Agreement is to provide flexibility and control over the assets placed within the trust, while also allowing the granter to retain the ability to modify or revoke the trust during their lifetime. By utilizing this type of trust, individuals can ensure the seamless transfer of assets to their chosen beneficiaries upon their death, while minimizing tax liabilities and preserving privacy. There are several variations of the King Washington Qualifying Subchapter-S Revocable Trust Agreement, each tailored to specific needs and circumstances. Some common types include: 1. Granter Retained Annuity Trust (GREAT): This type of trust allows the granter to transfer assets into the trust while retaining an annuity for a specified period of time. At the end of the term, the remaining assets pass to the beneficiaries. 2. Qualified Personnel Residence Trust (PRT): With a PRT, the granter transfers their primary residence or vacation home into the trust and continues to reside in the property for a predetermined period. After this period, the property passes to the beneficiaries, potentially reducing estate tax consequences. 3. Charitable Remainder Trust (CRT): A CRT allows the granter to transfer assets into the trust and receive income for a specified period. Afterward, the remaining assets are donated to a charitable organization, providing potential tax benefits. 4. Dynasty Trust: This type of trust allows for the ongoing and untamed transfer of wealth across multiple generations, potentially protecting assets from creditors and minimizing estate taxes. It is important to consult with a qualified attorney or financial advisor to determine the most suitable type of King Washington Qualifying Subchapter-S Revocable Trust Agreement based on individual goals and circumstances. Proper legal counsel ensures compliance with applicable laws and maximizes the intended benefits of the trust structure.
King Washington Qualifying Subchapter-S Revocable Trust Agreement
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FAQ
Three commonly used types of ongoing trusts qualify as S corporation shareholders: grantor trusts, qualified subchapter S trusts (QSSTs) and electing small business trusts (ESBTs).
In the most common scenario, in order for a grantor trust, such as a joint revocable trust, to remain an S-corporation shareholder, the trust should allow for the distribution of the S-corporation stock to a permissible shareholder within two years after your death.
An irrevocable trust that is setup as a grantor trust, qualified subchapter S trust or as an electing small business trust may own shares of an S corporation.
The Internal Revenue Code specifies broad categories of trusts that qualify as S shareholders. One of these, the qualified Subchapter S trust (QSST), is modeled after the grantor trust. It is eligible to hold stock in an S corporation, and, under the S corporation rules, it is treated as a Subpart E trust (Sec.
A qualified revocable trust (QRT) is any trust (or part of a trust) that was treated as owned by a decedent (on that decedent's date of death) by reason of a power to revoke that was exercisable by the decedent (without regard to whether the power was held by the decedent's spouse).
As an initial matter, as long as the business owner is living, his or her revocable trust is treated as a grantor trust for income tax purposes, and as such, is an eligible S corporation shareholder.
As an initial matter, as long as the business owner is living, his or her revocable trust is treated as a grantor trust for income tax purposes, and as such, is an eligible S corporation shareholder.
This trust type is established by your will. It's an eligible S corporation shareholder for up to two years after the transfer and then must either distribute the stock to an eligible shareholder or qualify as a QSST or ESBT.
A Qualified Subchapter S Trust, commonly referred to as a QSST Election, or a Q-Sub election, is a Qualified Subchapter S Subsidiary Election made on behalf of a trust that retains ownership as the shareholder of an S corporation, a corporation in the United States which votes to be taxed.
A trust can hold stock in an S corp only if it (1) is treated as owned by its grantor for income tax purposes under us grantor trust rules, (2) was a grantor trust immediately before its grantor's death (the trust can be a shareholder only for two years from that date), (3) received stock from the will of a decedent (