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7/24/2013 The IRS "hurdle rates" for August have been announced by the IRS.  These rates increase over July's rates.  Loans to trusts for children and GRATs are excellent examples of available strategies utilizing these rates.  If assets are invested and deliver a return in excess of 0.38% for short-term loans, 1.63% for mid-term loans, 3.16% for long-term loans and 2.0% for GRATs,taxpayers can transfer the excess earnings to benefit their children with little or no gift tax.

7/6/2013  Individuals with children with disabilities often use Special Needs Trusts to be certain their child continues to receive government benefits.  Many of these trusts do not provide the Trustee with the discretion to use trust funds for important beneficial purposes because such use would terminate the child’s right to government benefits.  This is true even if the Trustee determines the desired use is of greater importance than the government benefits.

Wealthy taxpayers often overfond special needs trusts because the restrictions in the Trust limit the possible use for that level of assets.

All individuals should continue to review the provisions of the special needs trusts that will be, or have been, established to be certain that the family’s needs are properly met.

7/5/2013 The IRS "hurdle rates" have increased a little in July.  The Section 7520 rate is now 1.4%.  This is still a very low rate, but may indicate a trend of rising interest rates.  Now is the time to review your estate planning and determine if wealth transfer strategies that take advantage of these low rates are appropriate for you and your family.

6/6/2013 The IRS "hurdle rates" are still extremely low.  Taxpayers with potentially taxable estates and those who want to benefit their children currently, can use these rates to transfer assets to their children with little or no gift tax. Loans to trusts for children and GRATs are excellent examples of available strategies.  If assets are invested and deliver a return in excess of 0.18% for loans and 1.2% for GRATs, the excess earnings can be transferred with no gift tax.