I'd like to create a fully-discretionary irrevocable Nevada trust for my son + wife. Assets include marketable securities only. I spoke to a Nevada attorney. They asked if I wanted the grantor version (SLAT/IDGT) vs non-grantor (SLANT). Hmmm. That wasn't something I'd considered. It got me researching before I get back to them.
The biggest draw in a SLANT would have been CA state income taxes savings on undistributed income (if done correctly per Kaestner case). However, I discovered that CA has a throwback rule to reclaim taxes if beneficiaries remain in CA at the time of distributions. The later is a likely scenario for my son/wife so that defeats that potential benefit. In addition, SLANTs also seem to be more expensive to setup and maintain.
On the other hand, grantor trusts have several features that I like: tax burn, optional tax reimbursement, swap powers, etc. Most importantly, they allow me some backdoor access to trust assets if my wife pre-deceases me.
So I feel a SLAT/IDGT sounds fine for us. Is there something I might be missing?
Thanks!
The biggest draw in a SLANT would have been CA state income taxes savings on undistributed income (if done correctly per Kaestner case). However, I discovered that CA has a throwback rule to reclaim taxes if beneficiaries remain in CA at the time of distributions. The later is a likely scenario for my son/wife so that defeats that potential benefit. In addition, SLANTs also seem to be more expensive to setup and maintain.
On the other hand, grantor trusts have several features that I like: tax burn, optional tax reimbursement, swap powers, etc. Most importantly, they allow me some backdoor access to trust assets if my wife pre-deceases me.
So I feel a SLAT/IDGT sounds fine for us. Is there something I might be missing?
Thanks!
Statistics: Posted by acacia24 — Wed May 08, 2024 8:41 pm — Replies 2 — Views 310