Dec 012011
 
End Of The Year Tax Planning - GRATs

With interest rates continuing to hold at near record lows, now is the time to consider adding a GRAT to an estate plan.  A Grantor Retained Annuity Trust (GRAT) is an estate planning technique based primarily on interest rate assumptions.  It utilizes a trust that is set to exist for a specific number of years and then terminate when the term ends.  The GRAT is funded using assets that are considered likely to appreciate in value at a rate greater than that projected by the IRS, which for GRATs established in December is 1.6%.  Essentially, the GRAT mechanism allows capital More…

May 242011
 
Making Use of GRATS Before It’s Too Late

The IRS recently announced its intent to publish Revenue Ruling 2011-13 which provides various prescribed interest rates for June 2011 for federal income, estate, and gift tax purposes. According to the IRS, the June section 7520 rate will be 2.8%. The reason this rate is relevant is because it serves as a reminder of the importance of establishing a Grantor Retained Annuity Trust (GRAT) now, while interest rates are low and the opportunity is still available. A GRAT is an estate planning technique based primarily on interest rate assumptions. It begins with the formation of a trust that typically exists More…