A common estate planning strategy is the sale of assets to a defective grantor trust. Generally speaking, the grantor establishes an irrevocable trust with his family members as the beneficiaries. Thereafter, the grantor sells assets with significant potential for appreciation to this trust, in exchange for a down payment and a promissory note.1 If the trust is structured properly, not only are capital gain taxes avoided,2 but the grantor also retains the income tax
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