The several departments being perfectly co-ordinate by the terms of their common commission, none of them, it is evident, can pretend to an exclusive or superior right of settling the boundaries between their respective powers; and how are the encroachments of the stronger to be prevented, or the wrongs of the weaker to be redressed, without an appeal to the people themselves, who, as the grantors
of the commissions, can alone declare its true meaning, and enforce its observance?
2 (stating "the grantor
may wish to consider a longer-term Grat" in light of new regulations).
Such unfunded trusts are commonly set up as a "defective" irrevocable trust meaning that it will be treated as a grantor
trust for tax purposes and any income will be reported and taxed to the grantor
The trust has three "points" -- a grantor
(also called a settlor or a trustmaker), a trustee, and one or more beneficiaries.
Proposals in President Obama's 2013 budget plan are targeting the grantor
trust, which is a widely used estate planning technique that can result in considerable tax savings for the grantor
and the trust beneficiaries.
Although the grantor
cannot change the beneficiaries of the ILIT, the trust agreement could give the grantor
the right to cancel or modify a beneficiary's annual withdrawal rights.
The IRS issued final regulations providing guidance on the portion of property (held in trust or otherwise) includible in a grantor
's gross estate if the grantor
has retained the use of the property or the right to an annuity, unitrust, graduated retained interest or other payment from the property for life, for any period not ascertainable without reference to the grantor
's death or for a period that does not in fact end before the grantor
's death (T.
Although no one tool will work best in every situation, there is one tool which is used more often then not, this tool is called a Grantor
Retained Annuity Trust (GRAT).
A qualified revocable trust is a trust that was treated as a grantor
trust during the life of the decedent due to his power to revoke the trust (see Q 844).
The primary advantages of the RLT allow a grantor
to: (1) provide for the management of assets upon his mental or physical disability and avoid conservatorship proceeding; (2) reduce costs and time delays by avoiding probate; (3) lessen the chances of a successful challenge or election against a will; (4) maintain confidentiality by not having to file a public will; and (5) avoid ancillary administration of out-of-state assets.
A charitable lead trust is generally taxable as a grantor
trust (see Q 1450) if an upfront charitable deduction is claimed (see Q 1338).
A simple technique for achieving this objective is the intentionally defective irrevocable grantor