Free Report: What Is A Grantor Retained Annuity Trust?

A grantor retained annuity trust is a wealth preservation tool that can be used by high net worth people who are exposed to the federal estate tax when certain circumstances exist. Before we get into the details, we should take a look at some relevant information about the federal estate tax and the gift tax. The federal estate tax carries a 40 percent maximum rate, and this is quite a large number, especially when you consider the fact that your estate is comprised of assets that you have left after paying taxes all of your life. Many people think that the estate tax is excessive and unfair, but regardless of how you may feel about the tax, it is a fact of life. Click here to read the whole report or download the PDF. The post Free Report: What Is A Grantor Retained Annuity Trust? appeared first on Northern California Center for Estate Planning and Elder Law.
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What Is a Grantor Retained Annuity Trust?

There are various different strategies that can be implemented to mitigate gift and estate tax exposure. In this post we will look at the value of the grantor retained annuity trust as a tax efficiency tool, but we should explain the federal transfer tax parameters first. Unified Gift and Estate Tax Exclusion The federal estate tax credit or exclusion is the amount that can be transferred free of the death tax. We are getting near the end of the 2014 calendar year, but for the rest of this year, the estate tax exclusion is $5.34 million. Every year there are inflation adjustments, and the adjustment for 2015 will be $90,000, so that will bring the exclusion up to $5.43 million. In addition to the estate tax, there is also a federal gift tax. It is unified with the estate tax, and as a result, the exclusion is a unified lifetime exclusion. The exclusion encompasses lifetime gifting along with the value of your estate. If you are exposed, you are looking at a top rate of 40 percent. Gra
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