GRATs and Mitt Romney's estate planning

No one really knows what will happen with the estate and gift taxes in 2013--if Congress does nothing, we're back to a $1,000,000 exemption.  President Obama's proposed budget sets it at $3,500,000.  We do know that the $5,120,000 exemption we have this year is a great planning tool to move assets to the next generation, something that several of my clients are finding useful.

Mitt Romney took advantage of great advice and used a grantor retained annuity trust (GRAT)  to transfer appreciating assets to future generations of his family free of gift tax.  The grantor must survive the term of the GRAT for the asset to be excluded from his estate, but the term can be very low (although Obama's budget proposes a minimum 10-year term, which is another reason to do your planning now).  The grantor receives annuity payments during the term of the GRAT, and the rest goes to future generations and avoids a lot of taxes.  Combined with a Delaware trust, this strategy can provide security for beneficiaries for decades to come.

If you'd like more information regarding advanced planning strategies and the value that a professional trustee and trust company can provide at little or no additional cost, please contact me at U.S. Trust, Pasadena.
  

Two new conservation easements

I've written before about conservation and preservation easements, and I'm pleased to see that the Pasadena Heritage organization has received two new easements--one on the historic Freeman House, designed by Alfred and Arthur Heineman, and the other on a commercial building in the Playhouse Historic district.

I wasn't aware that Pasadena Heritage holds 82 easements, making it one of the largest easement holders in the West.  They conduct annual inspections of the properties to be sure the easements are being honored.

There may be tax breaks available, and you can feel good about preserving a piece of history and architectural art.

My talk on estate planning and probate basics

I'll be speaking this March 28, 2012, on wills, living trusts, irrevocable trusts, estate taxes, trust administration and probate--it's a webinar by LawReviewCLE that I'll be giving with Rhode Island attorney Anthony Mignanelli. Click here for more information.