Dynasty Trusts Under Attack
By LAURA SAUNDERS
WSJ
It's official: A type of trust used by the wealthy to shelter assets from estate taxes for hundreds of years, or even forever, is under fire.
The proposal, which first appeared a few weeks ago on a hit list of estate provisions in President Obama's 2012 budget, would limit tax-free "dynasty trusts" to 90 years.
The chances of passage are practically zero this year, say experts. But taxpayers should know that the idea is in play—and act accordingly. As proposed, the change would apply to new trusts or additions of money to existing ones, but not to those already funded.
Bottom line: If you are considering setting up a dynasty trust, move swiftly. "This proposal reinforces the other reasons for doing so," says Julie Kwon, a partner at McDermott, Will & Emery in Silicon Valley. Among them: the current generous terms of the estate and gift tax—a $5 million individual exemption and a top 35% rate, both of which are set to expire at the end of 2012.
(More here.)
WSJ
It's official: A type of trust used by the wealthy to shelter assets from estate taxes for hundreds of years, or even forever, is under fire.
The proposal, which first appeared a few weeks ago on a hit list of estate provisions in President Obama's 2012 budget, would limit tax-free "dynasty trusts" to 90 years.
The chances of passage are practically zero this year, say experts. But taxpayers should know that the idea is in play—and act accordingly. As proposed, the change would apply to new trusts or additions of money to existing ones, but not to those already funded.
Bottom line: If you are considering setting up a dynasty trust, move swiftly. "This proposal reinforces the other reasons for doing so," says Julie Kwon, a partner at McDermott, Will & Emery in Silicon Valley. Among them: the current generous terms of the estate and gift tax—a $5 million individual exemption and a top 35% rate, both of which are set to expire at the end of 2012.
(More here.)
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