• COMMON TRUST SCENARIOS

Common Trust Scenarios

  • Widower: Age 80, Adult Children, Appreciated Stock/Real Estate

    Problem: Need more income, want to avoid capital gains tax

    Solution: Charitable Remainder Trust with replacement life insurance

  • Husband and Wife: Age 72, No Children, $1,000,000 of highly appreciated public stock

    Problem: Need more income, (Not really a tax problem)

    Solution: Charitable Remainder Trust

  • Husband and Wife: Age 58-57, Save for retirement, Business assets (apartments, mobile home park, raw land, closely held business, office building)

    Problem: Need retirement income, need income tax deduction

    Solution: Net Income Plus Make-up Trust, (Retirement Unitrust)   Defer payment for 10 years

 

Factors that may indicate a Charitable Remainder Trust situation

  • Client age 60 or older
  • No children
  • Appreciated assets
  • Need more income
  • Avoid capital gains tax
  • High tax bracket and need income tax write-offs
  • Need to change an asset (Get out of a business, don't want to manage an apartment, leverage their unified credit in gifting, diminished economic value through depreciation, split of the assets through partnership split or divorce.)
  • Taxable estate-federal estate tax
  • Diversification
  • Charitable intent
  • Young donor with a large position in a single stock

 

Factors that may indicate a Grantor Lead Trust situation

  • Client any age
  • One year high income
  • Sale of a business
  • Sale of real estate
  • Exercising stock options
  • High tax bracket and need income tax write-offs
  • High salaried employee
  • Business owner
  • Annual gifting to charity presently
  • Charitable intent helpful
  • Want principal back

 

Factors that may indicate a Non-Grantor Lead Trust situation

  • Client any age
  • Taxable estate
  • Gifting growth assets out of estate
  • During life or testamentary transfer
  • Annual gifting to charity presently
  • Charitable intent helpful
  • Want principal back to heirs