Circa Pict. & Prod. Co. Intnl Inc. (fka CPPD)

[islandtime]

Wonder were OUR money is??

http://www.oshins.com/pages/1/index.htm

Dynasty Trust

QUESTION 1a: Assuming a 50% estate tax and an after-tax investment return of 7.2%, and assuming your child outlives you by thirty years, if you transfer $1 million to a single generation trust in which the trust terminates when your child turns thirty, how much has your estate planning advisor cost your grandchild by failing to advise you to use a beneficiary controlled generation-skipping trust (i.e., a trust for your child and his/her descendants that is controlled by the child and is estate tax protected, asset protected and divorce protected)?

ANSWER 1a: $4 million. $1 million growing at 7.2% per year becomes $8 million after thirty years. Using a single generation trust, the IRS gets $4 million and your grandchild gets $4 million. Using a generation-skipping trust, your grandchild gets the entire $8 million.

QUESTION 1b: Assuming the same facts as in QUESTION 1 above, does the answer change if your child is sued or gets divorced?
ANSWER 1b: Yes. Using a single generation trust, the IRS gets $4 million and your grandchild gets anywhere from nothing to $4 million depending upon the severity of the lawsuit or divorce settlement. Using a generation-skipping trust (which is divorce protected and creditor protected), your grandchild still gets the entire $8 million.

QUESTION 1c: Why would anybody ever create a single generation trust when they can otherwise create a beneficiary controlled generation-skipping trust for each child (i.e., a separate trust for each child and his/her descendants that is controlled by the child and is estate tax protected, asset protected and divorce protected)?

ANSWER 1c: We can only speculate that the person must really dislike his or her descendants. [If you can come up with a better answer to this question, please email it to [e-mail].]

Nevada Asset Protection Trust

QUESTION 2: There are only five states that allow self-settled asset protection trusts (i.e., asset protection trusts in which the grantor can be a beneficiary). Those states are Nevada, Alaska, Delaware, Rhode Island and Utah. Of the five states, Nevada generally requires only a two-year waiting period for the asset protection, Utah generally requires a three-year waiting period, and Alaska, Delaware and Rhode Island generally require a four-year waiting period. Which of the five states has the most favorable rules for protecting your assets? [Select only one answer.]

(a) Nevada because it has the shortest waiting period to obtain the asset protection;

(b) Alaska because it just seems fairer to the creditor to give him/her an opportunity to take more of your hard-earned assets

(c) Delaware because [see Alaska]

(d) Rhode Island because [see Alaska]

(e) Utah because [see Alaska]

ANSWER 2: Nevada. This is an easy one! No explanation is needed.