GRAT


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AcronymDefinition
GRATGrantor Retained Annuity Trust
References in periodicals archive ?
In a rolling short-term GRAT strategy, you create a short-term GRAT (say, one with a two-year term), then fund the GRAT with your stock, rolling each year's annuity payment into a new GRAT.
Building a legacy with your single-stock holdings: how best to share the wealth
If the grantor structures the GRAT trust for 5 years, the grantor must live 5 years and one day; the grantor must outlive the trust period.
Resource article: transferring the business
There are ways to mitigate the risk of the grantor's failure to survive the specified GRAT term.
GRATs: the time is now: Grantor Retained Annuity Trusts, or GRATs, are having a moment. Here's why estate tax changes and low rates are making these products so appealing--and what you need to know when considering them for clients
A GRAT is also a bet that the assets the client places into the trust will appreciate in value at a rate that is greater than an IRS-prescribed interest rate.
GRATs in 2010: still a viable estate and gift tax planning option
GRATs are very short-term trusts (usually two to five years in duration) that thrive in low-interest environments.
Back to the future: estate planning for 2010 and beyond: estate planners look for ways to use this year's expiration of the estate tax and other byproducts of Congressional disarray to their clients' advantage
If the senior member survives the annuity term, none of the remaining GRAT assets will be includible in his or her gross estate for estate tax purposes.
Estate planning during turbulent times
For asset classes other than S Corps, if the remainderman is not a "member of the family" a GRIT is likely to be preferable to a GRAT or GRUT for the following reasons:
Estate planning with S corporations after 1997 using GRITS, GRATS and GRUTS
Each GRAT is a wealth transfer vehicle that receives its initial funding from the grantor, and transfers annuity payments to the grantor's personal portfolio.
Single stock and core capital tables: how single stock affects core capital requirements
Example (2): Example (2) in the regulations illustrates the calculations for determining the portion of a GRAT that must be in included in a decedent's gross estate.
Inclusion of certain trusts in a decedent's gross estate under Sec. 2036
Even in an economy that made thousands of lawyers extinct, a GRAT was still a viable estate-planning tool in a low interest rate environment, and remained a lush feeding ground for estate planners.
Winning at Darwin's game: changes in federal law--plus Illinois' estate tax, newly decoupled from the federal tax schedule, and our new "virtual representation" statute--present survivor-style challenges and opportunities to estate planners
Commissioner, 115 TC 589 (2000), the Tax Court held that it is possible to structure a GRAT on a "zeroed out" basis so the value of the grantor's retained annuity exactly equals the value of the property transferred to the trust.
Iceberg ahead! Navigating the murky waters of gift-tax-return preparation
Therefore, planners often create multiple GRATs and vary the terms of the trusts to balance the risk of the grantor's untimely demise with the potential benefits that GRAT planning provides.
Using GRATs in tax planning during troubled economic times
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