A Granter Retained Annuity Trust (GREAT) is a commonly used estate planning tool that individuals in Los Angeles, California, can utilize to transfer assets to their beneficiaries while minimizing estate taxes. A GREAT is an irrevocable trust created by a granter, who transfers assets into the trust and retains the right to receive fixed annuity payments for a specified term. After the term ends, the remaining assets in the trust pass on to the named beneficiaries, typically the granter's children or other family members. The Los Angeles California Granter Retained Annuity Trust provides several distinct types, including: 1. Standard GREAT: This is the most common type of GREAT, where the granter contributes assets to the trust and, at regular intervals, receives annuity payments based on a predetermined fixed percentage of the initial trust value. The annuity payments are typically made annually. 2. Zeroed-Out GREAT: Also known as a Walton GREAT, this variant of the GREAT is designed to minimize estate taxes to almost zero. The granter sets the annuity payments to equal the trust's total value, resulting in no taxable gift. 3. Rolling GREAT: A rolling GREAT allows for multiple Grants to be created successively, each with its own annuity term. This strategy can be useful when there is a significant appreciation potential for the transferred assets. 4. Charitable GREAT: This type of GREAT involves naming a charitable organization as the remainder beneficiary. By doing so, the granter can receive annuity payments for the specified term, receive an income tax deduction, and contribute to a charitable cause. Los Angeles California Granter Retained Annuity Trusts offer several advantages. Firstly, the granter has the opportunity to transfer assets to their beneficiaries while potentially reducing gift and estate taxes. Secondly, should the assets appreciate beyond the annuity payments set, the excess value can pass on to the beneficiaries with minimal tax consequences. Lastly, since the granter retains the right to annuity payments, they can ensure a steady income stream during the trust term. It is crucial for individuals considering a Granter Retained Annuity Trust in Los Angeles, California, to consult with experienced estate planning professionals and attorneys familiar with the specific laws and regulations governing trust creation and taxation in the state.
Los Angeles California Grantor Retained Annuity Trust
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