WHAT IT IS: A Qualified Terminable Interest Property Trust (QTIP) is a type of Credit Shelter Trust.
WHO IT'S FOR: A QTIP is used by couples who have taxable estates. In function, it's a marital deduction trust that limits the surviving spouse's access to and control of the trust property.
WHAT IT IS: Opportunity cost is a calculation that captures both:
The price paid for an activity or object, and
The value of alternative uses of the time and/or money involved.
If someone has created a Crummey Trust you can be quite certain they're doing so in part to limit their estate tax liability.
A Crummey Trust is ideal for parents or grandparents who have some combination of the following factors:
"Do you know how much it will truly cost you to make a gift?" By posing this question to prospective donors, you can raise their interest in the topic of the after-tax cost of a gift. Specifically, how big a charitable deduction will the gift let the donor take?
Almost everything you own and use for personal purposes, pleasure or investment is a capital asset. When you sell a capital asset, the difference between the amount you sell it for and your basis--what you paid for it--is a capital gain or capital loss.
Because a significant portion of major giving comes about via the estate planning process, it's to your advantage to understand how and when different tax advantages come into play.
In this case, there's a key difference in the way capital gains are treated if:
Watch this place for draft bequest language and for draft gift agreement
It's very important to never promote gift annuities as investment vehicles or compare them to investment alternatives. The gift annuity is a gift that generates cash payments to a donor or others for life.
Strongly encourage benefactors to have the gift annuity transaction and related documents reviewed by their legal counsel.