A Grantor Retained Annuity Trust (GRAT) is an estate planning technique whereby the grantor makes an irrevocable gift of assets to a trust, while retaining a payment stream from the trust in the form of an annuity usually for the life of the grantor, for a specified term of years, or for the shorter (but not longer) of those periods (1). GRATS are sometimes referred to as split-interest trusts because they are comprised of two forms of interest, the retained interest, which the grantor receives as an annuity, and the remainder interest, which passes on to the beneficiary upon termination of the trust. The gift tax on the transfer of the assets into the GRAT is determined when the GRAT is created based on the fair market value of the remainder interest at the time of the gift, which is the fair market value of the property transferred to the trust minus the value of the retained annuity interest. The retained interest is determined through an actuarial calculation that factors the present value of the annuity the grantor receives using the §7520 rate. §7520 provides, in part, that the value of any annuity is to be determined under the tables prescribed by the Secretary and by using an interest rate equal to 120 percent of the Federal midterm rate in effect under §1274(d)(1) for the month in which the valuation date falls (2).
Calculating the GRAT Remainder Interest
There are three steps involved in calculating the value of the remainder interest. The first step is finding the Table B annuity factor for the appropriate trust term and the applicable federal rate for the month during which the transfer to the trust occurs. Table B can be found on the IRS website. The next step is computing the value of the grantor’s an...
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24. http://claritywealthadvisors.com/wp-content/uploads/2012/05/Irrevocable-Life-Insurance-Trusts-ILITs.pdf
25. http://www.lexisnexis.com/legalnewsroom/estate-elder/b/estate-elder
26. http://wealthcounsel.typepad.com/legalblog/2008/03/what-are-hangin.html
27. http://www.investopedia.com/terms/s/secondtodieinsurance.asp
28. http://ezinearticles.com/?Grantor-Retained-Annuity-Trusts&id=3656315
29. http://www.ddrs.com/grits-grats-and-defective-grantor-trusts-the-best-laid-plans/
30. https://pts.aboutestateplanning.com/documents/QPRT_Trust.pdf
31. Code Sec. 1361(e)(1)(A)(i)
32. Reg. §1.1361-1(m)(2)(i)
33. http://www.americanbar.org/content/dam/aba/events/taxation/taxiq-fall11-howell-smith-trusts-paper.authcheckdam.pdf
34. Regulation,§1.641(c)-1
35. Treas. Reg. §1.641
36. Treas. Reg. §1.641
According to the ASC 718-20-55-94: If modifications happen after the awards have become fully vested, the additional compensation costs should be recognized on modification dates.
The new lift has an economic life of 20 years and we would like to make 14% on our investment. The NPV factor of 14% at 20 years is 6.6231. By multiplying our net yearly income or our annuity of $500,000 times the NPV factor of 6.6231 we will have a NPV of $3,311,550.
The IRS allows for multiple methods for figuring cost basis on stock. The methods allowed are specific share identification, first in first out (FIFO), or average basis. Specific share identification is just what it says; you identify the shares you are selling based on the lot that you purchased them in. With FIFO, the IRS takes the assumption that you sold the first shares you bought. This usually ends up being the least tax efficient way to sell shares, as share prices increase over time and the first share you bought would have the lowest basis. The IRS also allows you to elect to use average basis method. This method allows you to take the average of shares you purchased and multiply it by the amount of shares you are selling. In order to take this election you must send written notice to the broker or servicer of your account. On the following page is an example of a basic computation of basis for each method.
On September 12, 2014, Denise Rockett filed a complaint against Eugene Nigro, Esq. Nigro was reportedly negligent when handling legal matters in her late husband’s estate. Specifically, the complainant alleges that Denise, as Executrix of her late husband’s estate, was intentionally excluded from major decisions, not properly compensated, and deprived of control over their properties. Nigro allegedly breached his fiduciary obligation and violated Mass.R.Prof.C. 1.4(b), 1.7(b), and 8.4(c).
A Quistclose trust arises when money is paid to a recipient for a specific purpose, if that purpose fails the money is held on trust for the payer. It mostly arises in insolvency cases where the proprietary rights have to be established. However, this type of trust has been thought to be inconsistent with the traditional trust principle. Many have suggested the Quistclose trust must be treated as any other fully fledged security device taking into account the protection it offers the payer on insolvency and should therefore be registrable. This essay critically analyses the concept of Quistclose trust, whether it differs from the resulting trusts.
Commenters suggested that VA’s estimate of an extra 30 minutes per applicant is incorrect and will take more time to review 36 months of financial documents. VA does not anticipate adding an additional 30 minutes to the process time for each application. We believe the process time will decrease with the new rule making and cause for more claims to be processed. VA will not request 36 months of bank statements or tax return information from the claimant. The claimant evidence listed on the application will be used to process the claim for pension benefits.
Pelsmacker De, P., Geuens, M. & Van den Bergh, J. (2004) “A European Perspective”. Journal of Marketing Communications . Pearson Education Limited, pp. 185.
The principles of constitution of trusts are derived from the case of Milroy v Lord (1862 where turner L.J. stated that the complete constitution of a trust requires the actual transfer of property from the person making the gift to the beneficiary, a transfer of the intended gift to the trustees to be held in trust for the beneficiaries or the self-declaration of a trustee. The principle in this case is that a gift can only be enforced in equity if it satisfies one of the three requirements. Where the trust does not meet any of the three requirements the trust is considered an imperfect on incompletely constitutes trust. If the donor fails to complete all the formalities required by common law, then equity will not assist the intended beneficiary and thus the gift will be imperfect. The equitable maxim applicable is that equity will not complete an imperfect gift.
The third paragraph contains three separate powers of appointment. The first power of appointment is granted by Roosevelt when he request that his executors “collect and receive the rents, profits, interest and income, and apply them to the use of my wife, Edith Kermit Roosevelt, during her life.” Roosevelt, the donor, is giving a power of appointment to his executors (his wife and two sons – who are donees) that require them to use the income generated to provide for his wife.
It is a concealed arrangement made between a testator and the trustee and is made to come into force after death. A justification for ST is the ‘dehors the will’ theory which means the trusts arise outside of the will - a inter vivos trust. Its purpose is to benefit another individual that hasn’t been written in the formal will. The testator will leave property to the trustee under the will with the understanding that they will hold the property as a gift for which they will then later on be expected to pas...
(i) only the periods the property was held by the person relinquishing the property (or any related person) shall be taken into account under subparagraph (B)(i), and
Step 6: The bond is sold to investor and the trustee gives the issuer the net proceeds (Zelman, 2003).
The continuing value for the residual earnings was determined by taking 2010s projected residual earnings and multiplying it by 1 plus
It has been asked in the given scenario to evaluate Neuberger LJ's approach to the relationship between the doctrines of the constructive trust and proprietary estoppel. To evaluate that, it is necessary to explain the definition of the constructive trust and proprietary estoppel .
The Aim of the National Trust to Provide Time Capsules of Ownership The National Trust aims to provide time capsules of ownership in and around the Wimpole Estate. Wimpole Hall had many owners over a period of about 400 years, each owner leaving their own legacy. The National Trust has the job of untangling the layers of history to recreate snapshots of different points in time. By examining each owner and their stamp on Wimpole, it is possible to see whether the National Trust is successful in creating their stated aim.