Grantor Trusts Provide Flexibility and Ease

January 23, 2019 by Michael O'Brien

A trust may be taxed as either a grantor trust or a nongrantor trust. Each type of trust has advantages and disadvantages. This article examines a grantor trust and situations in which it might be useful.

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Michael O'Brien

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Michael and his team work very closely with you to help build a strategy for you regarding estate planning. They do not overdo it. They work hard to be certain their suggestions/recommendations fit your needs. Michael asks great questions, listens well and delivers on his commitments. I was very appreciative and hugely satisfied.

Anonymous Client Review September 8, 2020

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Paul Client Review September 8, 2020

Family business owners, farmers, ranchers and landowners face unique challenges surrounding how to preserve the family business or farm—a symbol of their heritage. Sadly, over 70 percent of all family businesses don’t survive the transition to the next generation. Estate taxes play a significant role in that problem. However, estate taxes aren’t the only costs chewing up assets passed from one generation to the next. Probate fees and other settlement expenses can significantly reduce an owner’s legacy. On top of that are the problems surrounding the fair distribution of those assets to heirs.
Land Rich, Cash Poor
The typical farm family is land rich, cash poor. With hundreds of thousands, if not millions, of dollars locked up in equipment, livestock, structures and land, the net worth may be impressive. But when you look at the cash flow, it’s another story entirely. Estate taxes will be based on the current market value of all your assets. If your heirs can’t readily come up with the cash from other sources, they may have no recourse but to sell the farm just to pay estate taxes and other settlement costs.
Estate Planning Solutions
Your farm or business poses two estate planning challenges:

How can you preserve it so that you can pass it on intact to the next generation

How will you equitably distribute it among your heirs.

Achieving these two goals means planning in advance for such expenses as estate taxes, as well as implementing strategies that give you maximum control over how, when, and to whom ownership of your farm transfers. Contact our office for more information about your options. Also be sure to read more about Business Planning and Asset Protection strategies here.

Tom Client Revew September 8, 2020

Michael has a comprehensive knowledge of estate palnning needs and trust issues. I trust his guidance and counsel completely.

Jim Client Review September 8, 2020

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Land Rich, Cash Poor

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