Family businesses — Now’s the time for estate planning

Description

Abstract: The combination of historically low gift tax rates, historically high exemption amounts and favorable interest rates makes it an ideal time for family business owners to share the wealth. This article shows how a grantor retained annuity trust (GRAT) and a sale to an intentionally defective grantor trust (IDGT) can separate ownership succession from management succession and thus help owners transfer business ownership without giving up control, while also funding retirement. A sidebar discusses additional options for transferring family business interests to the younger generation.