What You Should Know About Your GRAT (Grantor Retained Annuity Trust)
Cantey & Hanger, L.L.P.
2100 Burnett Plaza
801 Cherry Street
(817) 877-2800 (Cantey & Hanger Receptionist)
(817) 877-2885 (Ice Direct Line)
(817) 878-2944 (Secretary)
(817) 877-2807 (FAX)
E-mail: Ice@ABAnet.org
http://www.trustsandestates.net/
Copyright 2003
All rights reserved.
TABLE OF CONTENTS
What You Should Know About Your GRAT (Grantor Retained Annuity Trust)
How To Make LARGE Gifts
WithouT Paying Gift Tax
or Using AnY Gift Tax Unified Credit
By Noel C. Ice
What
You Should Know About Your GRAT (Grantor Retained Annuity Trust)
WHAT ARE SOME EXAMPLES OF HOW A GRAT MIGHT WORK?
What is the Gift Tax Value of the Remainder Interest
According to the IRS?
What is a Quick Example of What the Remainder
Beneficiaries Get Under the Facts Just Recited?
Can a Person Make a MultI-Million Dollar Gift Without Paying
Gift Tax?
Are THere Tax Savings to Be Had, Even if Walton Does Not Apply?
HOW DOES A GRAT COMPARE WITH AN OUTRIGHT GIFT?
What Are Some Examples of How an Outright Gift Might
Compare to a GRAT?
What Size Outright Gift WOuld Produce a $7,253,895 at the
End of 10-Years, at a 10% Growth Rate?.
Why is a GRIT more Effective if the Actual Rate of Return
Is Low?
How Do Income Taxes Figure into the Economic Analysis?
WHAT IS THE INTEREST RATE USED FOR GRAT TAX CALCULATIONS;
i.e., WHAT IS THE §7520 RATE?
WHY IS A GRAT AN ATTRACTIVE ESTATE PLANNING TECHNIQUE?
WHY IS IT IMPORTANT FOR GIFT TAX PURPOSES, THAT A RETAINED
INTEREST Be A “QUALIFIED INTEREST”?
WHAT IS THE “SUBTRACTION METHOD” FOR VALUING A GIFT?
WHAT IS A GRIT AND HOW IS IT DIFFERENT FROM A GRAT?
HOW IS A GRIT TAXED FOR TRANSFER TAX PURPOSES IF A
BENEFICIARY IS AN APPLICABLE FAMILY MEMBER?
WHO IS AN APPLICABLE FAMILY MEMBER?
WHAT IF NONE OF THE BENEFICIARIES OF THE GRIT IS AN
APPLICABLE FAMILY MEMBER.
WHAT IS A QUALIFIED ANNUITY INTEREST?
WHY DID CONGRESS REQUIRE THE ANNUITY TO BE A FIXED RATE?
WHAT HAPPENS IF THE GRANTOR DIES PRIOR TO THE EXPIRATION
OF THE TERM INTEREST?
What is the §2001(b)(2) Adjustment?
WHO CAN BE THE TRUSTEE OF A GRAT?
CAN THE ANNUITY IN A GRAT INCREASE EACH YEAR?
CAN THE ANNUITY IN A GRAT DECREASE EACH YEAR?
WHAT IS THE INFAMOUS EXAMPLE 5?
IF EXAMPLE 5 IS GOOD LAW, CAN THE GIFT EVER BE REDUCED TO
ZERO?
WHAT WERE THE FACTS IN THE WALTON CASE?
WHAT WAS THE ISSUE IN THE WALTON CASE?
WHAT WAS THE HOLDING OF THE WALTON CASE?
WHAT IS THE EFFECT OF THE WALTON CASE ON THIS MEMO?
CAN A GRAT SATISFY THE ANNUITY WITH A PROMISSORY NOTE?
Might thE Ruling Provision Just Discussed Become the Basis
For Future Legislation?
HOW IS A GRAT TAXED FOR INCOME TAX PURPOSES?
CAN A GRAT REQUIRE THAT THE GRANTOR BE REIMBURSED FOR
INCOME TAXES ATTRIBUTABLE TO THE ANNUITY?
MUST A GRAT REQUIRE THAT THE GRANTOR BE REIMBURSED FOR
INCOME TAXES ATTRIBUTABLE TO THE ANNUITY?
IS THE FAILURE TO REIMBURSE THE GRANTOR FOR INCOME TAXES A GIFT TO THE
TRUST?
WHEN MUST THE ANNUITY BE PAID?
When Must an Annuity be Paid, If the Annuity is Payable
More Frequently thaN Annually?
WHAT HAPPENS IF THE IRS DISAGREES WITH THE INITIAL VALUE
PLACED ON THE TRUST ASSETS?