Charitable Lead Trusts: Types and Taxation

Charitably inclined high-net-worth individuals often want to provide for their philanthropic goals while reducing their tax liability. While there are many different ways to do this, there are some lesser-used options that can create unique opportunities for charitable giving. 

An often underutilized but valuable tool in estate planning is the Charitable Lead Trust.

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Employee Spotlight: Shanna Coressel, Senior Trust Officer

EmployeeSpotlight Shanna

Alliance’s pride is in its people. Although the pandemic has shuttered many businesses and downsized others, Alliance Trust Company’s doors remain open, and the company continues to grow and expand. We’ve more than doubled our staff in the past three years to meet demand, investing in the best and brightest stars to add to our team.

We’re proud to highlight our team and show what makes us different than any other trust company you’ve ever seen. We Are Nevada.™

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Employee Spotlight: Natasha Davis, Executive Director of Client Development

EmployeeSpotlight Natasha

Alliance’s pride is in its people. Although the pandemic has shuttered many businesses and downsized others, Alliance Trust Company’s doors remain open, and the company continues to grow and expand. We’ve more than doubled our staff in the past three years to meet demand, investing in the best and brightest stars to add to our team.

We’re proud to highlight our team and show what makes us different than any other trust company you’ve ever seen. We Are Nevada.™

Continue reading Employee Spotlight: Natasha Davis, Executive Director of Client Development

What is a Charitable Remainder Trust and How Are They Taxed?

A significant benefit of Charitable Remainder Trusts is that they allow the opportunity for donors to know they will be giving financial support to a favored charity in the future. Charitable Remainder Trusts are commonly used for the purpose of planned giving within a thoughtful and holistic financial plan.

Alliance administers many different kinds of Charitable Remainder Trusts. Learn more about how they are taxed differently than other types of trusts in this article.

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Estate Planning Tax Changes: What To Expect Under New Administration

Changes to Both Gift and Estate and Capital Gains Taxes expected under Biden’s administration

President Joe Biden presented reform strategies during his presidential campaign creating a prudent need for high net worth families to review their estate plans early in 2021. While campaigning, President Biden proposed several tax changes, with two of them significant estate planning tax changes.

The first is a premature reduction of the gift and estate tax exemption from the Tax Cuts and Jobs Act of 2017. The second is ending the step-up in tax basis for capital gains taxes on inherited property. Let’s take a look at both.

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Part 2: Asset Protection and Nevada Asset Protection Trusts, Frequently Asked Questions

Examining Nevada Asset Protection Trusts: Common Questions Our Trust Officers Receive

In Part 2, we examine typical questions regarding Nevada Asset Protection Trusts. Nevada Asset Protection is sought after globally, and among the primary reasons estate planners look to Nevada as their preferred trust jurisdiction.

In part 1, we answered six general questions we often receive about Asset Protection Trusts in general.

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Part 1: Asset Protection and Nevada Asset Protection Trusts, Frequently Asked Questions

Six Common Questions Regarding Asset Protection Trusts

Part 1 focuses on general Asset Protection Trust questions we often receive from families and advisors. Part 2 focuses on Nevada Asset Protection Trusts.

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Foreign Grantor Trust: The Basics

Care for Your Off-Shore Beneficiaries

Foreign families with loved ones in the U.S. may wish to set up a foreign grantor trust.

The foreign grantor trust allows international families to take advantage of tax benefits, increased flexibility, political stability, and secure asset protection laws.

What is a Foreign Grantor Trust?

A foreign grantor trust is both a foreign trust and a grantor trust. The trust is not subject to U.S. income tax on income produced by non-U.S. situs assets. 

A revocable foreign grantor trust established in the U.S. remains revocable until the death of the grantor at which time it becomes irrevocable. The irrevocable trust benefits the U.S. beneficiary, but any U.S. situs assets are then subject to U.S. tax. 

If the settlor has the power to revoke the trust, it is considered a revocable trust for U.S. tax purposes.

If the grantor is both the settlor and owns the assets in trust, it is also considered a grantor trust and is not subject to U.S. tax on non-U.S. sourced income.

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Three Significant U.S. Trust Tax Cases, One Issue: Nexus Between a State and a Trust

When are states permitted to tax undistributed trust income?

As I am researching another precedent-setting trust case for an upcoming virtual continuing education panelist discussion for IICLE (Illinois Institute for Continuing Education), it’s hard to ignore the trend we see regarding trust taxation.

In 2018, we closely followed the Fielding case’s trajectory with our business development director and company president. We watched as Fielding won in Minnesota’s Supreme Court and as the case landed on the steps of the Supreme Court of the United States.

Also, on the SCOTUS steps at the time was the Kaestner case out of North Carolina. As many of us are very aware, SCOTUS denied hearing Fielding but argued Kaestner, and the rest is history.

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