$22.1M. By contrast, the estate would still be $20M, plus the grantor’s $400k of interest, but reduced by the income tax liabilities it must pay. The end result is that the value is over $22M, while the trust’s grantor’s estate will be slightly lower than $20M, producing a $2 Million shift in value to the trust and outside the estate. At a 40% top estate – grantor’s tax rate, an $800,000 estate tax savings. that’s IDGT AND GRAT TRUST DESIGN:
$22.1M. By contrast, the grantor’s estate would still be $20M, plus the $400k of interest, but reduced by the income tax liabilities it must pay. The end result is that the trust’s value is over $22M, while the grantor’s estate will be slightly lower than $20M, producing a $2 Million shift in value to the trust – and outside the grantor’s estate. At a 40% top estate tax rate, that’s an $800,000 estate tax savings. IDGT AND GRAT TRUST DESIGN: