TELESEMINAR: Designing and Drafting GRATS in Estate Planning – A National Perspective
March 25, 2014
12:00 – 1:00 p.m.
1.00 MCLE hours
Grantor Retained Annuity Trusts (GRATs) are effective vehicles for parents and grandparents to transfer assets to a junior generation while still retaining income from the property for a period of time. If the grantor outlives the term of the trust, its assets pass to the junior generation without estate taxes. There are also substantial gift tax benefits to the donor if the trust is properly structured. GRATs are ideal where the family has an asset –a family business or real estate – that is appreciating, because the appreciation passes tax-free to the junior generation. Low interest rates also help lower any taxable amount to the grantor. GRATs are very effective and very complex, and their use also restricts the use of other “freeze” estate planning vehicles. This program will provide you with a practical guide to understanding, structuring and drafting GRATS for maximum client benefit.
- Statutory framework and requirements for GRATs
- Financial and tax treatment of properly structured GRATS – estate, gift, income taxes
- Getting the term of the trust right – balancing life expectancy, income to grantor, and tax benefits
- Low interest rate impact on calculating the value of retained interest/tax liability of the grantor
- Drafting guidance and traps for GRATs
- Relationship of GRATS to other estate “freeze” planning vehicles
Sarah M. Johnson, Venable, LLP, Washington, D.C.
Blanche Lark Christerson, Deutsche Bank Private Wealth Management, New York