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The Power of Grantor TrustsThe Power of Grantor Trusts
Even the most sophisticated estate planners may be missing the point of grantor trusts. It's a risk-free, transfer-tax free, effortless wealth transfer tool that is much more powerful than most advisors realize. It amplifies the benefit of any other wealth transfer tool. In fact, grantor trusts are so effective, it could be malpractice to fail to suggest to a client that an irrevocable trust be structured
March 1, 2006
David A. Handler, partner, Kirkland & Ellis LLP, Chicago
Even the most sophisticated estate planners may be missing the point of grantor trusts. It's a risk-free, transfer-tax free, effortless wealth transfer tool that is much more powerful than most advisors realize. It amplifies the benefit of any other wealth transfer tool. In fact, grantor trusts are so effective, it could be malpractice to fail to suggest to a client that an irrevocable trust be structured as one.
A “grantor trust” is a trust of which all the income is taxable to the grantor under Internal Revenue Code Sections 671 through 679, irrespective of whether any income is distributed to the grantor. A grantor trust has no independent existence from the grantor for income tax...
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