The October interest rates that the Internal Revenue Service set for estate-planning transactions and private loans are a record low, the Wall Street Journal has reported. Those rates, issued Sept. 19, will be reset for the month of November.
The October rates are as follows
- Short-term rate: down to 0.16% from 0.26%;
- Mid-term rate: down to 1.19% from 1.63%;
- Long-term rate: down to 2.95% from 3.57%; and
- Blended rate (estate-planning techniques) down to 1.4% from 2%.
The figures are good news for taxpayers hoping to take advantage of the low rates. For example, intrafamily loans are looking more attractive. This would be a good time to lend money to a child to buy a home.
It's also a good time to take a closer look at "related party" loans, those between a small business and the owner or between family members. If you informally borrow money from your business, you can now formalize the arrangement at a reduced cost.
You could also set up a GRAT, a grantor-retained annuity trust. You can temporarily transfer assets to a trust through a GRAT, and at the end of the term, you'll get an annual annuity based on interest rates.
To discuss other ways to benefit from lower rates, it would be wise to speak to a Fort Myers estate planning attorney.
Help from an Estate Planning Attorney in Fort Myers is Just a Phone Call Away
Fort Myers estate planning attorney Matthew A. Linde understands firsthand the importance of careful estate planning and the complexities of financial legal matters, such as probate, tax litigation and guardianship. For help with your estate planning concerns, contact our Fort Myers office to schedule a one-on-one meeting with a professional who can answer your questions - 239-939-7100 or 844-764-5492.