Sarah Friar, the Goldman Sachs alum who serves as its chief financial officer, put 1 her shares million in a grantor retained annuity trust, before payment processor Square went public in November.
Eric Friedman, cofounder and chief technology officer of Fitbit, stuck 4 million shares in a GRAT before the fitness tracking phenom’s June IPO. William Wang, founder and majority owner of ‘HDTVmaker’ Vizio, that has filed to go public, set up two GRATs this year, any with 450000 shares. Generally, GRATs are a terrific way to transfer wealth without paying gift or estate taxes, So in case you own stock in a startup. Your family should benefit from a GRAT particularly if you act now, before the Federal Reserve starts raising interest rates, even if you don’t.
GRAT works just like this. Here’s the urgency.a number of assetsless sexy than pre IPO Facebook ‘stockare’ going to grow more than 2percentage. Of course, you put stock in a trust that pays you an annuity for a set number of years, typically two to five. There is some more info about this stuff on this website. What’s left after that goes to your beneficiaries, usually your kids. Before the Federal Reserve started cutting rates to rescue the economy, the 7520 rate for GRATs set up this month is just 2, compared with 2percent in August 2007. Ok, and now one of the most important parts. While reducing the taxable value of your gift to your beneficiaries to million now like the idea that their GRATs will move a bit of their wealth to their kids should their family win the startup lottery. 18 states plus the District of Columbia still impose their own death taxes, and 16 of them have lower exemptions than Uncle ‘Sam some’ tax the first dollar left to heirs. Notes Greenwich. Every person’s lifetime exemption from estate and gift taxes is a hefty million free of federal estate tax without fancy planning, just after all.