We just attended one of the top estate planning conferences in the country. Held October 28th and 29th the Notre Dame Tax and Estate Planning Institute had speakers from around the country who presented as to the most current thinking on estate planning issues. In this era of legislative uncertainty there is one wealth transfer strategy with significant appeal for high net worth families-- grantor trusts.
Grantor trusts require the grantor (Dad) to pay the income taxes on the trust earnings while the full amount of the trust may accumulate for next generation beneficiaries (children and grandchildren). Structured properly, the income tax paid by Dad on a grantor trust represents transfer to next generation free of estate and gift tax. There are many possible enhancements to the strategy, however at the core stands the grantor trust as a powerful strategy that high net worth taxpayers should consider using.
