Wealth Preservation, Trusts and Estates

The Grantor Retained Annuity Trust (GRAT) has

been an excellent and widely used federal estate tax savings tool.  However, President Obama took aim at the GRAT in his 2011 budget proposals.  Additionally, the House has included provisions targeting short-term and rolling GRAT planning tools in legislation that has passed at that level.  Although that particular House legislation has not made it through Senate, there is a significant amount of discussion and proposed legislation in the Senate that would require a GRAT to be for a term no less than 10 years.  This would not eliminate the GRAT as a planning tool, but would curb its use.   Read this recent Forbes article that outlines how the GRAT is used, how it is being attacked and how it will be used into the future.

Keep in mind that it is likely that the Federal Estate Tax will return in 2011 and we will need every resource available to help limit what could be a tax in excess of 45% for every dollar over $1,000,000 in an estate.  We encourage all clients and friends to keep their out for the final legislation of the federal estate tax system and to be ready to update estate plans accordingly.

Doug is a Partner with Unruh, Turner, Burke & Frees, P.C. which is a full service law firm with offices located in Malvern, Phoenixville and West Chester, PA. Doug can be reached at 610 933 8069 or at dkaune@utbf.com. The Law Practice serves Chester County, Montgomery County, Delaware County, Bucks County, Berks County, Philadelphia County Pennsylvania (PA).

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If you have accumulated any wealth during your lifetime, and you have the desire to pass all or part of that legacy on to your heirs, you have probably been reading quite a bit lately about the unique planning opportunities that exist today.

And, it is true, that there are some conditions in the market place that have created unique and almost unparalleled opportunities to pass wealth to the next generation.

Historically low interest rates, real estate values, and temporary impairment in the value of otherwise strong family businesses mean that you can use a variety of techniques to pass stock, land, income producing assets, and interests in real estate to your heirs at a fraction of the long term value of those assets.

These conditions are not likely to continue, and there is a move afoot in Washington to eliminate some of these valid planning tools.

So planning now may be important. But, many people rush into these techniques without careful consideration of a number of important factors.

First and foremost, most of these techniques involve some aspect of irrevocability. It is therefore essential to review your current and long term cash flow needs to ensure that the gifting techniques will not impair your own security and lifestyle.

Care must also be taken to make sure that the technique or techniques used are the best match possible under all of the assumptions and current conditions. For example, should a GRAT be used? What happens if the trust is a grantor trust and you remain liable for the taxes? How does that impact your retirement cash flow?

The short version is that the time for action may be now and the need for speed is present. But, these techniques require you to carefully analyze your current estate, your cash flow and lifestyle needs, the risks of the marketplace and the best technique or combination of techniques for you under all circumsatnces.

David M Frees III is Chairman of the Trust, Estates and Wealth Preservation section of
Unruh, Turner, Burke and Frees

dfrees@utbf.com

His Avvo rating is “Superb” 9.5

For more information on estate planning, asset protection, protecting heirs
from divorce and litigation and related topics call Donna Brownback at 610-933-8069 for
an appointment or teleconference with David Frees

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With the cost of 4 year college educations continuing to soar

and, to out pace inflation, many of us are wondering how to save for our children. There are a variety of tools ranging from multiple 529 plans to UTMA accounts, to trusts, and outright savings in the parent’s own names.

But, if you want to know how the President of the United States of America is saving for his daughters, then the public disclosure of his gift tax returns and the Wall Street Journal have the answer. This is a great article on the advantages of front loading a 529 plan which can be done by parents and/or grandparents or other relatives without filing a gift tax return. And, now is a good time to consider such gifts as the market is so low that the gift might be able to grow substantially before it is needed.

Now how to get the money to put into the plan? That is another question.

Enjoy. Leave a question or comment below.

David M. Frees III, Esquire
David Frees’ AVVO Rating is a Superb 9.5
Unruh, Turner, Burke and Frees
610-933-8069
dfrees@utbf.com
David assistants Donna, Denise, Tra and Whitney can be reached to set up a telephone or in person appointment with David.

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The Wall Street Journal has an excellent article on the virtues and reasons for a GRAT right now. If you have been considering a GRAT (Grantor Retained Annuity Trust) there has probably never been a better time. Want to know more? Read on…

David M. Frees III, Esquire
610-933-8069
dfrees@utbf.com
www.paestateplanners.com

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Have you set up a GRAT, given a check or gifted property worth more than $13,000.00, paid for tuition or medical expenses for another person, given away real estate, corporate or business interests or other hard to value assets in 2008. Your gift tax return may be due.

Be sure to file or get an extension by the 15th of April. Need more information? Here is an IRS Gift Tax Publication.

Here is a short article we prepared for you at www.paestateplanners.com.

David M. Frees III, Esquire
AVVO Rated 9.5 Superb!
610-933-8069
dfrees@utbf.com

For questions, an appointment, a telephone conference or to get any of
our many probate, estate planning, and asset protection articles and publications,
call and ask for Donna or Denise who will be happy to help.

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Have you ever heard of a GRAT or a “Walton GRAT”? The Grantor Retained Annuity Trust is a powerful estate planning and asset protection technique that allows wealthy families and modestly wealthy families to move a great deal of value without incurring gift taxes at the time of the transfer. The GRAT also allows you to move assets out of your estate but to get some of the assets returned to you. This ability to gift and to use assets is very rare in the estate planning world.

The GRAT can be quite complicated and you will need to consult counsel. However, in the current environment where stocks, real estate, and business values are at historic lows, and, where interest rates are also low the GRAT is a tool that can really help families to protect and preserve assets for the next generation. In this brief video David Frees explains how it can work.

David M. Frees III, Esquire
dfrees@utbf.com
610-933-8069

To follow David on Twitter for the most up to the minute news and
information on the best estate planning and asset protection techniques for Pennsylvania residents.
Just click here.

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Yes. Believe it or not the current economic down turn presents some serious estate and asset protection planning advantages.  Now I never encourage clients to give away or to give up control over assets that they might need.  But, once your core assets reach a point where you feel secure in maintaining your lifestyle, the excess may be available for outright gifts, gifts in trust, gifts to UTMA accounts, or to fund 529 plans.

And many stocks values are quite depressed now.  So, they can be transferred with little or no tax consequences.  Then, when the rebound, the growth will benefit your heirs and will not be taxed in your estate.  Likewise, real estate such as shore or vacation home can be transferred at historically low values and trusts such as QPRT’s and GRATS will use historically low interest rates.

For more information David Frees can be reached at 610-933-8069.

His email is dfrees@utbf.com

Appointments and telephone conferences can be set by contacting Donna, Tara, Denise or Whitney at 610-933-8069.

Please feel free to comment below.

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Worried about your children and grandchildren getting sued or divorced and losing their assets or an inheritance?
Concerned that your estate plan no longer reflects your current thinking or the current laws?
Wondering how to best protect your assets and your lifestyle for yourself and your heirs?
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You can call for an appointment at 610-933-8069.  Appointments can sceduled for any one of our three convenient offices:

Phoenixville – 120 Gay Street, Phoenixville, PA 19460
Malvern – 116 E. King Street, Malvern, PA 19355
West Chester – 17 W. Gay Street, West Chester, PA 19380

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For Appointments at any office call 610-933-8069

David M. Frees III Chairman Wealth Preservation, Trust and Estates Section
Douglas L. Kaune Managing Partner Estate Section Chairman Elderlaw Solutions Section (R)

Email us at: dfrees@utbf.com            dkaune@utbf.com

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