If you have assets you anticipate will increase in value, you can “freeze” the value of those assets for estate tax purposes with an Intentionally Defective Grantor Trust, an “IDGT”. Most wonder why they would want an “intentionally defective” anything, but it references the fact your estate attorney will purposefully insert language making the transfer of assets to the trust an incomplete gift for income tax purposes but a complete gift for estate tax purposes. Therefore, immediately following the transfer to the IDGT, the IRS considers the trust’s assets to be owned by your heirs for estate tax purposes but still considered owned by you for income tax purposes. These differing classifications can be very beneficial for those with estate tax concerns, rather than a need for a step-up in basis at death.Continue reading “Intentionally Defective Grantor Trusts”
It’s common to hear attorneys and others refer to trusts, but you may not know exactly what they are or why they are needed. A trust is similar to an entity, such as a corporation or an LLC, in that
An Irrevocable Life Insurance Trust, or ILIT, should be of interest to any person buying life insurance. The ILIT is not just for people with estate tax issues. The ILIT can allow you to control how and when insurance proceeds are distributed to beneficiaries. Rather than going straight to the beneficiary, the insurance company pays the proceeds into a trust that then pays the amounts to the beneficiary as quickly or as slowly as you decide. Such a trust can be particularly beneficial when the potential beneficiary is younger, may have potential marital issues, or has difficultly managing money. Continue reading “Forming An Irrevocable Life Insurance Trust (ILIT)”
Many wonder what happens if you die without a Will. Each state, including Maryland, has its own laws that determine what happens to the person’s estate. The differences between each state’s laws do cause confusion, and your assumptions about Maryland’s laws may be incorrect and can cause incredibly negative problems.
When someone dies without a Will, the rules governing the estate are called “intestate laws”. When intestate laws apply, the deceased person may be referred to as having “died intestate” and having left an “intestate estate”. Your state’s intestate laws serve essentially as your Will if your family cannot provide an actual Will. Maryland’s intestate laws are often not what most people expect. Continue reading “Not Having a Will in Maryland”
Many people desire to give gifts and bequests to friends or relatives with special needs. But to accomplish this wish the person must consider whether the gift or bequest will cause the beneficiary to lose their government benefits. Ensuring the beneficiary will continue to receive their government benefits, such as Medicaid or Supplemental Security Income (SSI), may require that the person give the gift or bequest through a special needs trust, also known as a supplemental needs trust.
Obviously, when providing such a gift or bequest your intention is to improve the comfort of the person with special needs, not relieve the government of its burden. However, certain government benefit programs require Continue reading “Maryland Special Needs Trusts”
Please see my new page, Maryland Estate Planning. The page is a summary for those seeking basic advice regarding Maryland estate planning. This summary covers the most frequently asked questions and stresses my belief that most, if not all, people should consider some estate planning. I welcome any suggestions for additional content.
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