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Even Lower Interest Rates Present Planning Opportunities
Many are projecting that we are heading for all-time low interest rates due to current economic uncertainties. August/September is predicted to be an ideal time to lower the interest rate on existing intra-family notes. For example, if you sold assets to a Defective Grantor Trust ("DGT") or a 678 Trust (also known as a Beneficiary Defective Trust or "BDT") in exchange for a promissory note during the last few years, that promissory note may have an interest rate as high as 1.93%. You may now be able to lower that rate by half or more. By doing so, you will reduce the interest payments on the note, which reduces the amount coming back into your estate, and, in turn, saves the 40% estate tax on that build-up upon your death.

In many cases, it is relatively straight-forward to lower the interest rate on an intra-family loan.  Please contact us to discuss your specific situation.
 
Marvin E. Blum
 
 
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