Friday, March 15, 2013

Obama administration had proposed rule for grantor trusts that "ends life as we know it"

In August, 2012 “Accounting Today” ran an article by Roger Russell reporting that the Obama administration wanted to gut the advantages of grantor trusts for estate planning purposes, link here

Some are saying it’s “the end of life as we know it.”  It would have an effect on transferring (non liquid) assets out of an estate. It's not the end of the Internet!
However, owner-trustees who control these after inheritance find that their reportable personal income increases, often in unpredictable manners difficult to estimate in advance during the year (for withholding or estimated tax payments), subjecting them to more interest of penalties.  Real knowledge of a variety of financial products, some of them unfamiliar, is often necessary for proper handling.  Also important will be detailed understanding of how itemized deduction rules work.   

Beware the Ides of March (as well as April).

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