Let’s face it—nobody wakes up and says, “I can’t wait to figure out how my retirement assets are taxed after I die.” But at Gaughan & Connealy, we do wake up excited about that (don’t judge us—we’re estate planning attorneys, it’s our thing). And one of our favorite tools for making your legacy smoother, smarter, and more tax-savvy? The conduit trust.Wait, what’s a conduit trust? Is that like a trust that’s good with plumbing?Not quite. Though it does help keep the IRS from clogging up … [Read more...] about Your Kids, Your Legacy, and the IRS: Why a Conduit Trust Might Just Be the MVP of Your Estate Plan
estate taxation
The Magic of Grantor Trusts
An earlier blog examined “grantor trusts” and how they are an income tax issue, not an estate tax issue. Here’s a link to that prior blog, IRS Confirms Grantor Trust Status Alone Does Not Cause a Step-Up in Basis.As the prior blog indicated, grantor trusts may be drafted so they are not included in the taxable estate of the grantor for estate tax purposes, yet they are still taxed to the grantor for income tax purposes. These “intentionally defective grantor trusts” can be very powerful … [Read more...] about The Magic of Grantor Trusts
IRS Confirms Grantor Trust Status Alone Does Not Cause a Step-Up in Basis
Earlier this year the IRS released Revenue Ruling 2023-2. That Ruling examined a common situation in advanced estate planning. The grantor had set up an irrevocable trust and had gifted assets to the trust in what was a completed gift for gift tax purposes. The taxpayer retained powers which caused the trust to be taxed to the grantor for income tax purposes but did not cause inclusion for estate tax purposes. There are several such powers, such as the power to substitute assets under Code … [Read more...] about IRS Confirms Grantor Trust Status Alone Does Not Cause a Step-Up in Basis
