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Suggest You - Grantor Trust - What is It?
For almost three years, JR Andersen, CEO of mid-size software company Andersen High Tech (AHT), and his board have been uneasy. Business growth has been “OK” at eight percent but the market has been growing at a 15 percent annual rate. With almost half the growth from price increases, unit growth for the main product line has been less than five percent. Fortunately, margins have been expanding nicely along with management bonuses, so things aren’t too bad.Or are they?With business growth rates well below the market, AHT is losing customers and hence market share. At a minimum, this means lost opportunities.Competitors are gaining enough critical mass to develop the
If the grantor wants to retain certain control over his asset(s), it’s called a revocable trust; otherwise, it’s an irrevocable trust.
Revocable trusts and irrevocable trusts have significant asset protection and tax differences. One can think of a revocable trust like the kid next door that brings the ball to play basketball with the other kids. Everything is fine, as long as he makes the rules, and he makes the rules as he goes along. If you don’t agree, he takes the ball and goes home. The ball game is over. In the revocable trust,
Why do we have managers? I asked this question on a recent seminar and got into an intense argument with one of the attendees who was a large employer! I like to mix it a little and what fun it was to ask an employer to justify the existence of his managers:Vernon: Why do you have managers? Employer: To manage Vernon: You mean, to cope Employer: I mean, to manage Vernon: If not "manage" as in "to cope", "manage" as in ...what? Employer: Our managers are not just coping, they are making judgements and making decisions based on those judgements Vernon: Do your staff, including managers, have proc
HOW DOES A GRANTOR OF A TRUST RELATE TO THE TRUST CONTRACT?
The concept of a trust was first used in Anglo Saxon times and is contractual arrangement whereby property is transferred from one person (the grantor) to another person or corporate body (the trustee) to hold the property for the benefit of a specified list or class of persons (the beneficiaries).
Although a trust can be created solely by verbal agreement it is normal for a written document to be prepared which evidences the creation of the trust (the trust deed) which sets out the terms and conditions upon which the trust assets are held by the trustees and outlines the rights of the beneficiaries. In essence, a trust is not dissimilar to a will except that assets are transferred to trustees during lifetime rather than those assets being transferred to executors on death. The trust deed is analogous to the deed of will.
THE THREE ELEMENTS TO A TRUST DOCUMENT:
1. Grantor
2. Trustee
3. Beneficiaries
THE GRANTOR OF A TRUST
The grantor in a trust is the person with the bucks. In other words, the grantor of a trust contract is the owner of the asset(s) which could be any asset from personal residential real estate to stock accounts to business or partnership assets and anything else of monetary value. The grantor's motivation is to get asset(s) out of his name for either some or all of the following:
- Asset protection/wealth preservation
- Reduce potential frivolous lawsuits
- Elimination of the "probate jail process" (see definition, below)
- Elimination of estate taxes
- To gain some tax benefit or some other tax deferral benefit
If the grantor initiates the trust (contract), it’s called a grantor trust; otherwise it’s called a non-grantor trust. To me, it’s just legal garbage so lawyers can charge you more.
If the grantor wants to retain certain control over his asset(s), it’s called a revocable trust; otherwise, it’s an irrevocable trust.
Revocable trusts and irrevocable trusts have significant asset protection and tax differences. One can think of a revocable trust like the kid next door that brings the ball to play basketball with the other kids. Everything is fine, as long as he makes the rules, and he makes the rules as he goes along. If you don’t agree, he takes the ball and goes home. The ball game is over. In the revocable trust,
You want the world to know about your new and exciting holiday blast on the internet... so you're passing out your primary email address like candy. Is this a good idea? Big no! Here are four great reasons not to share your main email address with new people during an online event promotion.1. Having your email "accidentally" forwarded on.Unfortunately, not everyone in online business knows how to blind copy, or "bcc" their email recipients. Don't be surprised if you find yourself being copied to large groups of people whom you've never heard of. Not only does this increase the chance of some unwanted party trying to get your attention later, but it increases likelihood of
HOW DOES A GRANTOR OF A TRUST RELATE TO THE TRUST CONTRACT?
The concept of a trust was first used in Anglo Saxon times and is contractual arrangement whereby property is transferred from one person (the grantor) to another person or corporate body (the trustee) to hold the property for the benefit of a specified list or class of persons (the beneficiaries).
Although a trust can be created solely by verbal agreement it is normal for a written document to be prepared which evidences the creation of the trust (the trust deed) which sets out the terms and conditions upon which the trust assets are held by the trustees and outlines the rights of the beneficiaries. In essence, a trust is not dissimilar to a will except that assets are transferred to trustees during lifetime rather than those assets being transferred to executors on death. The trust deed is analogous to the deed of will.
THE THREE ELEMENTS TO A TRUST DOCUMENT:
1. Grantor
2. Trustee
3. Beneficiaries
THE GRANTOR OF A TRUST
The grantor in a trust is the person with the bucks. In other words, the grantor of a trust contract is the owner of the asset(s) which could be any asset from personal residential real estate to stock accounts to business or partnership assets and anything else of monetary value. The grantor's motivation is to get asset(s) out of his name for either some or all of the following:
- Asset protection/wealth preservation
- Reduce potential frivolous lawsuits
- Elimination of the "probate jail process" (see definition, below)
- Elimination of estate taxes
- To gain some tax benefit or some other tax deferral benefit
If the grantor initiates the trust (contract), it’s called a grantor trust; otherwise it’s called a non-grantor trust. To me, it’s just legal garbage so lawyers can charge you more.
If the grantor wants to retain certain control over his asset(s), it’s called a revocable trust; otherwise, it’s an irrevocable trust.
Revocable trusts and irrevocable trusts have significant asset protection and tax differences. One can think of a revocable trust like the kid next door that brings the ball to play basketball with the other kids. Everything is fine, as long as he makes the rules, and he makes the rules as he goes along. If you don’t agree, he takes the ball and goes home. The ball game is over. In the revocable trust,
According to the 2005 Annual Retail Theft Survey conducted by Jack L. Hayes International, Inc. shoplifters and dishonest employees continue to steal in record numbers. The survey reports that thieves stole over $5.8 million from the responding retailers in 2005. In addition, over 670,000 shoplifters and dishonest employees were apprehended and over $127 million was recovered from these thefts.One of the most interesting (yet frightening), aspects of the survey shows that the average amount in cash/merchandise that a dishonest employee stole was $724.15 (per theft). This contrasts significantly with the average amount that a shoplifter stole which was $126.87 (per theft).W
THE THREE ELEMENTS TO A TRUST DOCUMENT:
1. Grantor
2. Trustee
3. Beneficiaries
THE GRANTOR OF A TRUST
The grantor in a trust is the person with the bucks. In other words, the grantor of a trust contract is the owner of the asset(s) which could be any asset from personal residential real estate to stock accounts to business or partnership assets and anything else of monetary value. The grantor's motivation is to get asset(s) out of his name for either some or all of the following:
- Asset protection/wealth preservation
- Reduce potential frivolous lawsuits
- Elimination of the "probate jail process" (see definition, below)
- Elimination of estate taxes
- To gain some tax benefit or some other tax deferral benefit
If the grantor initiates the trust (contract), it’s called a grantor trust; otherwise it’s called a non-grantor trust. To me, it’s just legal garbage so lawyers can charge you more.
If the grantor wants to retain certain control over his asset(s), it’s called a revocable trust; otherwise, it’s an irrevocable trust.
Revocable trusts and irrevocable trusts have significant asset protection and tax differences. One can think of a revocable trust like the kid next door that brings the ball to play basketball with the other kids. Everything is fine, as long as he makes the rules, and he makes the rules as he goes along. If you don’t agree, he takes the ball and goes home. The ball game is over. In the revocable trust,
New Orleans is a major U.S. port of entry in the American South. It boasts large industries, many museums and world-famous seafood restaurants. The annual Mardi Gras is perhaps the best-known festival of New Orleans. Music, dance, and theater are part of people’s lives here. New technology has refined the music to a truly wondrous experience. A good recording studio contributes to good-quality music. A few tips to help you start on your small business of setting up a recording studio are described below.What Comprises a Recording Studio: A recording studio is a soundproof room designed around the principles of room acoustics to record sound with precision and accuracy. The mater
- Asset protection/wealth preservation
- Reduce potential frivolous lawsuits
- Elimination of the "probate jail process" (see definition, below)
- Elimination of estate taxes
- To gain some tax benefit or some other tax deferral benefit
If the grantor initiates the trust (contract), it’s called a grantor trust; otherwise it’s called a non-grantor trust. To me, it’s just legal garbage so lawyers can charge you more.
If the grantor wants to retain certain control over his asset(s), it’s called a revocable trust; otherwise, it’s an irrevocable trust.
Revocable trusts and irrevocable trusts have significant asset protection and tax differences. One can think of a revocable trust like the kid next door that brings the ball to play basketball with the other kids. Everything is fine, as long as he makes the rules, and he makes the rules as he goes along. If you don’t agree, he takes the ball and goes home. The ball game is over. In the revocable trust,
If you’re strapped for cash and you want to perform search engine optimization, you may be tempted to use one of the many pieces of do-it-yourself SEO software that are available on the market. The makers of each software program tout easy-to-use features and an inexpensive price as major selling points for these programs. While they may be easy to use, these programs can also be a waste of money because of a lack of features. Knowing the basics of do-it-yourself SEO software will help you to make a good SEO decision and save money for professional SEO efforts.FeaturesSEO software programs can have some features that make SEO a little easier for business owners. Howeve
If the grantor wants to retain certain control over his asset(s), it’s called a revocable trust; otherwise, it’s an irrevocable trust.
Revocable trusts and irrevocable trusts have significant asset protection and tax differences. One can think of a revocable trust like the kid next door that brings the ball to play basketball with the other kids. Everything is fine, as long as he makes the rules, and he makes the rules as he goes along. If you don’t agree, he takes the ball and goes home. The ball game is over. In the revocable trust, he has control and hence the name "revocable."
GRANTOR RETAINS CONTROL IN LIVING REVOCABLE TRUSTS
Since the grantor retains control in the living revocable trust, it can destroy your estate in the event of a lawsuit, serious illness or elderly care. The living revocable trust is also known as the living trust. From the grantor's perspective, the sole purpose of the living revocable trust is to eliminate the probate process.
- Assets in a trust, avoids probate
- Assets NOT in a trust goes to probate with or without a will
However, the grantor may or may not realize the living revocable trust is outright dangerous for asset protection, wealth preservation, and estate tax elimination. The living trust is obsolete for assets greater than $675,000. With the living trust the grantor (i.e. owner of the assets) retains significant power over his wealth and will not insulate assets from the lawsuit explosion. There’s absolutely no tax benefit, no asset protection and no wealth preservation benefits with the living revocable trust to the grantor. I do not recommend the living revocable trust for the grantor.
Personally, I think the living revocable trust is a sham perpetrated on the grantor by shameless professionals out to extract more than just one fee. Every time the grantor needs or wishes to change the trust deed, he needs to speak with his lawyer. The lawyer just garnered another fee. So I recommend to my clients, "Don't just walk. Run!"
FOR THE GRANTOR: NOTE ON ESTATE TAXES
Various tax proposals are being bandied about, including House Ways and Means Chairman Bill Archer who says that he's "pushing" to "gradually phase out" the death tax within the next 10 years. "Death by itself should not trigger a tax" says Chairman Archer. Currently, estate taxes vary from 37% to 55%. Only Japan has a higher rate of 70%. Germany takes a maximum of 40%, while Australia and Canada, take nothing.
When you add up your federal, state, probate, legal fees, accounting fees, appraisal fees, administrative and executor fees, and every other fee, it could easily cost you 70 to 80% of your estate. You can avoid these unwanted results with the Ultra Trust® the Medallion Trust®.
NOTE: The new 2001 tax phase-in for estate taxes, changes absolutely nothing. The estate tax is the only voluntary tax. The new laws have added confusion. You can avoid the voluntary estate tax by simply enginee
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