Meet Sam and Jill. They own income-generating real estate and want to limit the tax burden for their children.
Sam and Jill used most of their combined $22.8 million lifetime exemption. Their financial professional informs them that selling assets to an irrevocable grantor trust is one of the most efficient wealth transfer techniques. That way the proceeds will not be included in their estate, lessening the estate tax burden for heirs.
The couple establishes an irrevocable grantor trust and sells a portion of their rental properties to the trust. The trust purchases a survivorship protection VUL policy on their lives, and when they pass, their children will receive the death benefit free of income and estate taxes.
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