A new article GRATs Dodge Regulatory Bullet is published on Financial Advisor Magazine on December 20, 2010. A popular kind of trust that lets people pass money to family members
free of federal gift tax is likely to get a boost from the new tax deal
passed by lawmakers. The bill does not mention the trusts, easing fears
that the government would limit them. GRATs are a much used estate-planning tool, recommended by
tax advisers and particularly in demand recently because of low
interest rates and asset values. Stocks, real estate or other assets go into the trust, and
if their value appreciates over the rate, it goes to the recipient tax
free. Appreciating over the rate is known as "beating the hurdle." Most GRATs are set up for two-, three- or five-year terms.
The longer the GRAT runs, the bigger the chance the grantor could die
while it was still in force, in which case the tax benefits are lost.
Click here to read the entire article.
Posted by Yi Song, Associate Editor, Wealth Strategies Journal.
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