Non Grantor Trusts
Explore the intricacies and benefits of non-grantor trusts in estate planning for tax benefits and asset management.
How do non-grantor trusts differ in taxation compared to grantor trusts?
Non-grantor trusts are treated as separate tax entities, meaning they may help the grantor avoid taxable income from trust assets, thereby providing potential tax benefits. This separation can be advantageous for spreading income across different tax brackets or geographical locations. Additionally, non-grantor trusts might be used strategically by families to manage tax liabilities and safeguard asset growth. Unlike grantor trusts, the income generated by a non-grantor trust is taxed at the trust's tax rate, which might lead to different planning strategies for estate planners.
