Grantor trusts are a particularly powerful tool in estate planning. They allow the taxpayer to remove assets from their taxable estate, while those assets can grow tax-free because the grantor is paying the income tax for the trust.
The IRS released Revenue Ruling 2023-2 explaining that assets in a trust which is not included in the estate of the decedent don’t receive a “step-up” in income tax basis. This is the case even if the trust is taxed to the grantor for income tax purposes. This confirms the plain language of the statute and what we’ve long known.
Estate taxes can take a significant bite out of the assets you leave for your beneficiaries. However, various strategies can minimize this financial burden, ensuring that more of your estate goes to your loved ones rather than to the government. Below, we outline some of these approaches to help you navigate estate taxes effectively. Utilize … Read more