Discounted Gift Trusts

Here's a brief but engaging overview of how discounted gift trusts work:

The Gift That Keeps on Giving - At a Discount!
Intrigued by the idea of setting up an investment fund for your loved ones that grants tax-savvy returns? Enter the discounted gift trust - an exciting estate planning vehicle allowing you to gift assets while still reaping some benefits.

Here’s the clever twist: you place cash or other assets in an irrevocable trust to be held for your beneficiaries. But you retain a lifetime interest in the trust entitling you to a steady income stream from it.

The discounted part refers to how once you receive the lifetime interest, the upfront value of the assets put in is reduced, or “discounted.” Hence the discounted gift trust.

When you pass, the remaining assets in the trust pass to the beneficiaries free of inheritance taxes. Plus returns and growth rack up tax-efficiently in the interim. Voila - you gift assets, get income, and shrink future inheritance taxes all in one savvy play.

The benefactors enjoy serious wealth down the road, while your estate preserves value now. It’s a tactful win-win using one of those specially crafted vehicles estate planners are famous for dreaming up.

Pretty magical financial wizardry - ask an expert if the discounted gift trust makes a good addition in your personal situation and family wealth planning strategy!