Read Our Reviews

Theus Law Offices is rated 5 out of 5.0 stars based on 5 review(s).

---

Most people have many questions about estate planning but never make a move to go see an attorney. Before Theus' free seminar I did not even know their were attorneys that specialized in only estate planning. Thank goodness I attended...as I did not even know what asset protection was, even though I had assets. Most people think a written will is fine and pass away thinking that things will be as they wished/stated. Most times that is not the case. I urge you to go Theus Law Offices for consultation. They are friendly and down to earth with your wishes being #1. I cannot say enough good things about them. Now that I have gone to Theus I rest so much easier knowing that my wishes...are going to be held up...just as I wanted...no doubt about it....Thanks to the Theus family !

- Peyton Guillory

---

The Theus Law Offices’ Family Estate Planning is a must from my perspective. I had recently lost my dad when I decide to attend the in-person Workshop at the time. My dad and I had attended a similar workshop some four (4) years prior but my dad didn’t elect at the time to move forward. I so wished that he (my dad) had done so because now I am helping my mom go through the Succession/Probate steps with a lawyer currently. If you or your loved ones haven’t made this decision with Estate Planning, I would strongly encourage you to attend this web-based workshop/webinar. Graves Theus is a great attorney to go with for this important step in you and your family’s planning for the future in many, many ways!!!

- Mark Johnson

---

The Theus Law Offices’ Family Estate Planning is a must from my perspective. I had recently lost my dad when I decide to attend the in-person Workshop at the time. My dad and I had attended a similar workshop some four (4) years prior but my dad didn’t elect at the time to move forward. I so wished that he (my dad) had done so because now I am helping my mom go through the Succession/Probate steps with a lawyer currently. If you or your loved ones haven’t made this decision with Estate Planning, I would strongly encourage you to attend this web-based workshop/webinar. Graves Theus is a great attorney to go with for this important step in you and your family’s planning for the future in many, many ways!!!

- Mark Johnson

---

They are a wonderful Team!

- Jessica Cole

---

Estate planning is a complicated process, but my wife and I feel it is valuable and necessary. We started by attending an Estate Planning workshop offered by the Theus Law Offices and led by Jim Theus. That was about the wisest decision we have made in some time. We engaged the services of Theus Law Offices and have benefitted enormously from the direct working relationship with Jim Theus. They did not sign us up and then pass us off to a staff member. We worked with Jim Theus personally. When it was time to work with others of the staff, we found them friendly, knowledgeable, and professional. Jim Theus is exceptionally competent and patiently answers questions. His due diligence is admirable. We found their fees for estate planning reasonable and fair. You would be wise to consider using the services of Theus Law Offices if you are interested in estate planning. We are grateful for their help and recommend them to you without reservations. Our loved ones will also be the beneficiaries of a comprehensive plan, as are we. Doyle L Bailey

- Doyle Bailey

Blog

Ease itemized deduction limitations using a nongrantor trust


13 June, 2019

Ease itemized deduction limitations using a nongrantor trust
The record-high exemption amount currently in effect means that fewer families are affected by gift and estate taxes. As a result, the estate planning focus for many people has shifted from transfer taxes to income taxes. A nongrantor trust can be an effective option to reduce income taxes, and it offers a way around the itemized deduction limitations imposed by the Tax Cuts and Jobs Act (TCJA).
What’s a nongrantor trust?
A nongrantor trust is simply a trust that’s a separate taxable entity. The trust owns the assets it holds and is responsible for taxes on any
income those assets generate. A grantor trust, in contrast, is one in which the grantor retains certain powers and, therefore, is treated as the owner for income tax purposes.

Both grantor and nongrantor trusts can be structured so that contributions are considered “completed gifts” for transfer tax purposes (thereby removing contributed assets from the grantor’s taxable estate). But traditionally, grantor trusts have been the estate planning tool of choice. Why? It’s because the trust’s income is taxed to the grantor, reducing the size of the grantor’s estate and allowing the trust assets to grow tax-free, leaving more wealth for beneficiaries. Essentially,the grantor’s tax payments serve as an additional tax-free gift.

With less emphasis today on gift and estate tax savings, nongrantor trusts offer some significant benefits.
How can nongrantor trusts reduce income taxes?
The TCJA places limits on itemized deductions, but nongrantor trusts may offer a way to avoid those limitations. The law nearly doubled the standard deduction to $12,000 for individuals and $24,000 for married couples. (Indexed annually for inflation, the 2019 standard deduction amounts are $12,200 for individuals and $24,400 for married couples.) The TCJA also limits deductions for state and local taxes (SALT) to $10,000.

These changes reduce or eliminate the benefits of itemized deductions for many taxpayers, especially those in high-SALT states. By placing assets in nongrantor trusts, it may be possible to increase your deductions, because each trust enjoys its own $10,000 SALT deduction.

For example, Andy and Kate, a married couple filing jointly, pay well over $10,000 per year in state income taxes. They also own two homes, each of which generates $20,000 per year in property taxes. Under the TCJA, the couple’s SALT deduction is limited to $10,000, which covers a portion of their state income taxes, but they receive no tax benefit for the $40,000 they pay in property taxes.

To avoid this limitation, Andy and Kate transfer the two homes to an LLC, together with assets that earn approximately $40,000 per year in income. Next, they give 25% LLC interests to four nongrantor trusts. Each trust earns around $10,000 per year, which is offset by its $10,000 property tax deduction. Essentially, this strategy allows the couple to deduct their entire $40,000 property tax bill.
Beware the multiple trust rule
If you’re considering this strategy, be aware that the tax code contains a provision that treats multiple trusts with substantially the same grantors and beneficiaries as a single trust if their purpose is tax avoidance.

To ensure that this rule doesn’t erase the benefits of the nongrantor trust strategy, designate a different beneficiary for each trust. Contact us for more information.

Theus Law Offices specializes in a complete range of estate planning and elder law services, including wills, trusts, probate, successions, estate administration and probate litigation. If you need a Louisiana wills and trusts lawyer or succession attorney in Alexandria, Lafayette, Lake Charles, Baton Rouge, New Orleans, Shreveport, Monroe, or elsewhere in Central Louisiana, let our certified estate planning specialist and probate lawyers help you

Leave a Reply

Your email address will not be published. Required fields are marked *