Also found in: Financial.
GRATSGenealogy Research and Tracking System (U.S. Department of Homeland Security)
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Similar to the CRTs, QPRTs and GRATs, spousal interests in a SLAT should be reviewed in the context of the property settlement or alimony aspects of a divorce.
13) This comment will then clarify the operation of the grantor trust rules and provide a primer on some of the trusts those rules allow, including GRITs, GRATs, GRUTs, QPRTs, ILITs, and IDGTs.
Most GRATs are set up to run for a very short period--often two or three years.
As with GRATs, Congress chose not to impose additional restrictions on valuation discounts; thus, they will continue to be useful in wealth-transfer planning.
A series of short-term GRATs is actually more efficient than a single long-term GRAT at capturing the volatility of stocks: Their multiple term expirations provide more opportunities for a transfer of wealth.
The proposed rules changes are sure to displease clients and advisors who have relied on short-term GRATs to help achieve estate planning objectives.
The simplified idea behind a GRAT trust is that the principal gets returned to the creator of the trust and the growth goes to the (usually younger generation) beneficiaries without any estate or gift tax.
The Obama Administration has proposed tightening the rules on GRATs, and the House of Representatives has passed a bill that would restrict the use of GRATs.
In addition, the so-called "7520 rate" applicable to GRATs remains low (i.
248) "Zeroing out" the GRATs, taxpayers can make tax-free transfers of assets that are expected to appreciate substantially while retaining an income interest for the term of the GRAT equal to the value of the original transfer.
Such retained annuity, unitrust, and income (or use) interests are generally found in GRITs, GRATs, GRUTs, PRTs, QPRTs, CRATs, and CRUTs, but can be found in other trusts as well.