What is paid to the trust for the right to receive the private annuity?
The amount paid to the trust would be the value of the annuity interest multiplied by the actuarial probability of the insured dying that year survived by the grantor. Will the annuity valuation be respected? For the valuation of the contingent private annuity to be respected, it must pass the exhaustion test as outlined in Revenue Ruling 77-454 and Section 7520. The trust must have enough money to make the annuity payments if the contingencies are met, therefore, it should have sufficient assets or adequate life insurance on the spouse’s life to satisfy the required payments. Further, the contingent annuity agreement should contain a covenant prohibiting the trust from taking any actions that would materially impair its ability to meet its obligations if the contingency is triggered. What is a Dynasty Trust? Dynasty Trusts have been used by wealthy families for centuries to provide a legacy of wealth for future generations. A dynasty trust permits substantial property to pass from gen
Related Questions
- My attorney or tax advisor has never heard of a Private Annuity Trust or has heard of it and doesn think it is legal. How can they be assured that it is a legitimate Estate Planning strategy?
- Can a Private Annuity Trust be used to transfer a Family Limited Partnership or a Limited Liability Company?
- What is paid to the trust for the right to receive the private annuity?
