Maintain Control Over Your Trust
Setting Up a Grantor Trust in North Carolina
A grantor trust is any trust that allows you (as the grantor) to retain power over the trust income and assets. In other words, you are the 'owner' of part or all of the trust. Because the Internal Revenue Service (IRS) recognizes you as the owner of the trust assets, they will tax you rather than taxing the trust or your estate at a higher percentage.
At Armor Trust Attorneys, we focus our energy on setting up trusts that protect our client's financial interests and assets. We are an asset protection and estate planning law firm in Raleigh, North Carolina. Contact lawyer Erica Ferranti to learn what a grantor trust can do to help protect your assets and avoid unnecessary tax liabilities.
Examples of Grantor Trusts
Your trust will be a grantor trust if you retain any control over the trust, including:
- Acting as trustee (deciding who benefits from the trust / receives trust assets)
- Deciding when to revoke the trust
- Voting on any stock in the trust
- Deciding how trust funds are invested
- Benefitting from the trust income or being able to withdraw trust assets
- Retaining a significant "reversionary" interest in the trust (the trust assets may go back to you)
- Any revocable living trust is a grantor trust, and some irrevocable trusts also qualify. We often set up something called an "intentionally defective grantor trust," which — aside from its name — is simply a grantor trust created to intentionally use the grantor trust rules.
Estate Planning and Grantor Trusts
Grantor trusts are effective to protect both your assets and your estate. In estate planning, a revocable living trust allows you to avoid probate (making things much easier on your loved ones after you pass) and keep estate taxes low.
To learn about grantor trusts with grantor-retained interests, contact Armor Trust Attorneys by calling (919) 571-4398 or send us an e-mail
