A lot of people have talked about the amount of wealth that Mitt Romney has accumulated. Some people see that as a negative against him. Some see it as a positive in his favor in the Presidential campaign. This is not a political post. This is a post about how he might have used estate planning tools to help generate that wealth.
In 1995, Romney created a Family Trust. It has since grown to have $100 million in assets. He’s been able to do that without ever having to pay gift taxes on his on the money he’s transferred to the Trust. The maximum amount he could have personally contributed to the Trust without paying gift taxes is $11.89 million. He either somehow managed an average yearly return on the Trust’s investments of 26% or he found other ways to put money into the Trust.
A 26% average return on investment is unlikely even for someone with Romney’s private equity connections. That’s more than Bernie Madoff claimed his victims were making. However, there are ways that Romney could have grown the Trust. He might have used a Family Limited Partnership or a Grantor Retained Annuity Trust to fund his Family Trust. No one is sure exactly how Romney did it. It’s possible and experienced and qualified estate planning attorneys can help you fund your Trusts in the similar ways.
Timothy P. Murphy
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