Trusts and estates attorneys Jenny Boyer and Matt Thompson are featured in the November issue of Business North Carolina with their insightful article, “Death and Taxes for North Carolina Business Owners.”
This timely piece provides a deep dive into strategies for business owners to navigate changing tax laws and maximize wealth transfer opportunities. The article examines the current estate planning landscape, highlighting the looming reduction of the federal estate tax exemption in 2026, market volatility, and interest rate shifts. Boyer and Thompson emphasize proactive planning, presenting techniques like gifting, Grantor Retained Annuity Trusts (GRATs), and sales to grantor trusts. These approaches help business owners safeguard their assets and ensure tax-efficient wealth transfers.
An excerpt from the article explains the benefits of GRATs:
A grantor retained annuity trust ("GRAT") is a special kind of irrevocable trust. The person who creates and funds the trust – the "grantor" – retains the right to an annuity payment from the trust for a period of years. At the end of the term, the remaining trust property passes to other beneficiaries (such as the grantor's children) either outright or in further trust. Assuming the grantor survives the term, those remaining trust assets are removed from the grantor's taxable estate.
However, unlike a traditional gift of cash or gift in trust (which could trigger gift tax on the entire amount contributed), only the value of the remainder interest in the GRAT is considered a gift. Because there is no precise way to assess the value of the remainder interest at the beginning of the trust term, the government simply assigns a present value based on interest rates in effect at the time of the transfer.
Jenny and Matt also discuss techniques like intrafamily loans and installment sales to grantor trusts, providing business owners with practical ways to pass assets efficiently to future generations.
To read the full article, visit Business North Carolina’s November issue here.
