Elite Advisor Forum: GRATs: Time Is Running Out

Burton Mitchell‘s article titled “GRATs: Time Is Running Out” was published in the Elite Advisor Forum.

To view this article as a pdf, click here.

“By transferring appreciating assets to a GRAT, individuals may transfer those assets free of gift or estate taxes, provided the grantor outlives the GRAT annuity term and the transferred assets appreciate at a rate in excess of the monthly federal interest rate referenced by the § 7520 rate. Although the § 7520 rate continues to fall to unprecedented lows (2.0 percent in November 2010), pending legislation would increase the risk of inclusion of the assets owned by the GRAT in the grantor’s estate by establishing a minimum ten-year annuity term for all GRATs. Currently, annuity terms of as low as two years have been blessed by the courts and the Internal Revenue Service.”