Maybe in a follow up video: you described how the grandfather (settlor) could use part of his remaining estate exemption and apply it as as GST exemption to the Revocable Trust turned irrevocable at the settlor’s death. That option also exists for the settlor’s son to use his remaining GST exemption at his death to add to the exemption already added by the grantor (grandfather) to the trust that terminates on the settlor’s son’s death. Hopefully, the grandfather.’s and father’s exemptions plus the grandson’s exemption are enough to shield the grandson from GST when the trust terminates. I have read about using the future value of the grandfather’s exemption, not its original value at grandfather’s exemption, when the trust terminates for the grandson. The idea is a 2 MM trust funded with a 2 MM GST exemption that grows to 4 MM over the remaining life of the son is fully exempt from GST at the son’s death and trust termination. Is that correct? I cannot find any specific documentation on how one calculates the future value other than some general comments about documenting it on the 706 filed at the son’s death. It could get messy if the grandfather’s exemption partially covers the original value of the irrevocable trust, Something like it does exist because it is how the true dynasty trusts stay tax free generation after generation.
The GsT exemption is applied to the current value of the trust assets, and as they grow, they will remain exempt from future GST. You don’t have to reapply if everything was already exempt. It works in a similar way to a family bypass trust being exempt from estate tax on the surviving spouse’s death, even if the assets have gone up in value.
@@strohmeyerlawpllcThanks. I thought that it might get messy as the assets change over the life of the successor beneficiary. In my case, I don’t think that I will have enough left over in my exemption, post 2026 to fully cover the entire living trust turned irrevocable. I expect that, since much of the irrevocable trust will be an inherited IRA to the successor beneficiary distributed over 10 yrs, the remainder (Roth, homes, and taxable accounts) may synch with the amount that my estate can give to the effort. The inherited trad IRA within the trust will send its distribution outside the trust to get the anticipated lower individual tax rate of the successor beneficiary Tying in to your power of appointment video, I have several options for my successor trustee/beneficiary to reduce the GST hit to his children, his successor beneficiaries. Thanks again.
@@strohmeyerlawpllcThanks. Your comment made me question my understanding of the GST exemption. I was confused on the rules of how a grantor can use his GST exemption for a RT. I thought the estate tax exclusion was a pool used by the estate tax and GST. Used for estate tax meant less for generation skipping tax. Wrong. They are separate so the same estate tax exemption that shields the trust from estate tax also can shield the same amount for downstream beneficiaries from GST. It made me wonder if the only people that pay GST are beneficiaries with grantors whose executors forgot or did not know to file the right 706.
@@michaelblazin4093The "pool" concept applies between estate tax and gift tax--the unified credit. The starting number just happens to line up with the GST exemption.
Great information, but your audio is not synched to the video and it is very annoying and makes it hard to watch. Like watching a dubbed foreign movie.
@@accordiontube Thanks for confirming! I've seen this happen on other videos, and it looks like this can happen to any video when watching on mobile. I've found that it can be fixed by just reloading the video.
Maybe in a follow up video: you described how the grandfather (settlor) could use part of his remaining estate exemption and apply it as as GST exemption to the Revocable Trust turned irrevocable at the settlor’s death. That option also exists for the settlor’s son to use his remaining GST exemption at his death to add to the exemption already added by the grantor (grandfather) to the trust that terminates on the settlor’s son’s death. Hopefully, the grandfather.’s and father’s exemptions plus the grandson’s exemption are enough to shield the grandson from GST when the trust terminates.
I have read about using the future value of the grandfather’s exemption, not its original value at grandfather’s exemption, when the trust terminates for the grandson. The idea is a 2 MM trust funded with a 2 MM GST exemption that grows to 4 MM over the remaining life of the son is fully exempt from GST at the son’s death and trust termination.
Is that correct? I cannot find any specific documentation on how one calculates the future value other than some general comments about documenting it on the 706 filed at the son’s death. It could get messy if the grandfather’s exemption partially covers the original value of the irrevocable trust, Something like it does exist because it is how the true dynasty trusts stay tax free generation after generation.
The GsT exemption is applied to the current value of the trust assets, and as they grow, they will remain exempt from future GST.
You don’t have to reapply if everything was already exempt.
It works in a similar way to a family bypass trust being exempt from estate tax on the surviving spouse’s death, even if the assets have gone up in value.
@@strohmeyerlawpllcThanks. I thought that it might get messy as the assets change over the life of the successor beneficiary. In my case, I don’t think that I will have enough left over in my exemption, post 2026 to fully cover the entire living trust turned irrevocable. I expect that, since much of the irrevocable trust will be an inherited IRA to the successor beneficiary distributed over 10 yrs, the remainder (Roth, homes, and taxable accounts) may synch with the amount that my estate can give to the effort.
The inherited trad IRA within the trust will send its distribution outside the trust to get the anticipated lower individual tax rate of the successor beneficiary Tying in to your power of appointment video, I have several options for my successor trustee/beneficiary to reduce the GST hit to his children, his successor beneficiaries.
Thanks again.
@@strohmeyerlawpllcThanks. Your comment made me question my understanding of the GST exemption. I was confused on the rules of how a grantor can use his GST exemption for a RT. I thought the estate tax exclusion was a pool used by the estate tax and GST. Used for estate tax meant less for generation skipping tax. Wrong. They are separate so the same estate tax exemption that shields the trust from estate tax also can shield the same amount for downstream beneficiaries from GST.
It made me wonder if the only people that pay GST are beneficiaries with grantors whose executors forgot or did not know to file the right 706.
@@michaelblazin4093The "pool" concept applies between estate tax and gift tax--the unified credit. The starting number just happens to line up with the GST exemption.
@@michaelblazin4093No, it comes up with large trusts with more assets than GST exemption.
Great information, but your audio is not synched to the video and it is very annoying and makes it hard to watch. Like watching a dubbed foreign movie.
Thanks! I’ve just rewatched it and didn’t experience any audio syncing issues. Was it at a particular point in the video?
@@strohmeyerlawpllc I did not have any audio sync issues either. Great video and explanation.
@@accordiontube Thanks for confirming! I've seen this happen on other videos, and it looks like this can happen to any video when watching on mobile. I've found that it can be fixed by just reloading the video.