Contact UsMy husband and I want to set up a trust to pass on our business and assets to our four children. We would also like to take care of our grandchildren. What recommendations could anyone give us in regards to setting up our estate for our grandchildren? We know this is a complicated question but perhaps you could give us a few pointers on what we should do.
TaxConnections Members... Answer This Question
Want To be One of Our Tax Experts? Register Here
Tax Professional Answers
Robert Ferguson
First go get yourself a good estate planning attorney to set up the trust in the state of your residence. I have one client that has a similar trust to the one you are seeking. He and his wife are the current trustees and he also has his three children listed as subsequent trustees should they both pass on.
What his intentions are is that as he and his wife pass on the trust to his family and that his daughter become the trustee with his two sons becoming the first and second alternates. When his daughter becomes trustee, she will have the authority to add additional members (grand children) to the trust, with the approval of the two brothers, as they become of age. It follows my client's wishes to have his family participate in the trust and that it pass down through the generations. Right now it is worth about $8 million but grows each year,
I formed an LLC for him two years ago and this year made the trust the owner of the LLC. Now he has the ability to purchase and sell using the LLC and yet all of the proceeds fall into the trust. All taxes are paid on the income whether interest or profit, some of which is capital gains and some is not. It is a bit complex tax wise, but as it stands there is no double taxation on any of the earned income.
Leave a Comment
566 weeks ago
What his intentions are is that as he and his wife pass on the trust to his family and that his daughter become the trustee with his two sons becoming the first and second alternates. When his daughter becomes trustee, she will have the authority to add additional members (grand children) to the trust, with the approval of the two brothers, as they become of age. It follows my client's wishes to have his family participate in the trust and that it pass down through the generations. Right now it is worth about $8 million but grows each year,
I formed an LLC for him two years ago and this year made the trust the owner of the LLC. Now he has the ability to purchase and sell using the LLC and yet all of the proceeds fall into the trust. All taxes are paid on the income whether interest or profit, some of which is capital gains and some is not. It is a bit complex tax wise, but as it stands there is no double taxation on any of the earned income.