https://www.legacyprotectionlawyers.com Mon, 26 Nov 2018 22:46:33 +0000 en-US hourly 1 https://wordpress.org/?v=6.9.4 https://www.legacyprotectionlawyers.com/consider-using-short-term-grats/ Wed, 28 Aug 2013 16:36:00 +0000 http://www.legacyprotectionlawyers.com.php72-35.phx1-1.websitetestlink.com/consider-using-short-term-grats/ Read More »]]> Congress’s decision not to include a proposed minimum term for grantor retained annuity trusts (GRATs) in the tax legislation passed back in January — combined with low interest rates — may make it an ideal time to add short-term GRATs to your estate planning arsenal. A GRAT consists of an annuity interest, retained by you, and a remainder interest that passes to your beneficiaries at the end of the trust term. The remainder interest’s value for gift tax purposes is calculated using an IRS-prescribed growth rate. If the GRAT outperforms that rate — which is easier to do in a low-interest-rate environment — the GRAT can transfer substantial wealth gift-tax-free. If you die during the trust term, however, the assets will be included in your taxable estate. By using a series of short-term GRATs (two years, for example), you can capture the upside of market volatility but minimize mortality risk. If short-term GRATs might be right for you (consult us for more information), consider deploying them soon in case lawmakers revive proposals that would reduce or eliminate their benefits.

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