The IRS Section 7520 rate will decrease to 1.2% in June 2012. Therefore, May and June remain excellent times to enter into effective transfer tax planning. Near Zero Out Grantor Retained Annuity Trusts, Sales to Intentionally Defective Grantor Trusts and Charitable Lead Annuity Trusts remain attractive since interest rates are at historical lows.
Grantor Retained Annuity Trusts (GRATs), Charitable Lead Annuity Trusts (CLATs) and Private Annuities are positively affected by a decrease in the Section 7520 rate.
Grantor Retained Annuity Trusts (GRATs), Charitable Lead Annuity Trusts (CLATs) and Private Annuities are negatively affected by an increase in the Section 7520 rate.
Qualified Personal Residence Trusts (QPRTs) and Charitable Remainder Annuity Trusts (CRATs) are negatively affected by an decrease in the Section 7520 rate.
Qualified Personal Residence Trusts (QPRTs) and Charitable Remainder Annuity Trusts (CRATs) are positively affected by an increase in the Section 7520 rate.
Charitable Lead Unitrusts (CLUTs) and Charitable Remainder Unitrusts (CRUTs) are not sensitive to the changing Section 7520 rate.
The current estate planning environment makes this an opportune time to discuss transfer tax planning with your Eide Bailly Wealth Management Professional.
If you have questions, please contact us today at 877.355.8525.
