GRATs in Estate Planning Under Current Tax Law
Structuring Considerations, Income, Gift, Estate, and Generation-Skipping Transfer Tax Consequences
Course Details
- smart_display Format
On-Demand
- signal_cellular_alt Difficulty Level
Intermediate
- work Practice Area
Estate Planning
- event Date
Thursday, October 5, 2023
- schedule Time
1:00 p.m. ET./10:00 a.m. PT
- timer Program Length
90 minutes
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
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BARBRI is a NASBA CPE sponsor and this 110-minute webinar is accredited for 2.0 CPE credits.
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This CLE/CPE course will offer a comprehensive guide to structuring grantor retained annuity trusts (GRATs) under current tax law. The panel will go beyond the basics to provide specific drafting tools to avoid potentially costly mistakes and maximize GRATs' benefits. The panel will discuss client circumstances that benefit most from GRATs, tax consequences, and opportunities and challenges in the current economy. The panel will also discuss sample language for relevant clauses such as self-correcting features, asset substitution powers, term selection, and other critical components of a successful GRAT.
Ms. Fournaris advises clients on estate, tax, and generational wealth planning. High-net-worth individuals, multigenerational family groups, entrepreneurs, and owners of privately held businesses are among her clients. A significant portion of her time is devoted to working with women business owners, as well as women who control their family’s wealth. Ms. Fournaris' practice includes advising clients on trusts, tax planning, philanthropic and charitable giving, and estate planning.
Ms. Howard-Potter is a partner in the firm’s Tax and Wealth Management Department. She focuses her practice on estate planning and administration, charitable giving, trust and estate litigation, business succession planning and taxation.
Ms. Mendel has spent the last 15 years honing her craft counseling high net worth families on complex trust, estate and family office planning. She is a strong communicator who is skilled at listening to her clients – learning about their lives, business ventures and family needs – and helping them tailor a plan to achieve their goals.
A GRAT is an effective vehicle to transfer to heirs assets and property that will likely appreciate. When set up correctly, GRATs allow taxpayers to transfer property to their children at a minimal tax cost and allow the underlying assets to continue to grow in value outside of the taxpayer's estate. Estate planners must leverage the use of GRATs, ascertain essential structuring techniques, and overcome potential tax pitfalls.
Due to federal interest rates and specific asset values, there is an opportunity to maximize the use of GRATs in estate planning. GRATs are irrevocable trusts typically structured with a short term, allowing for the low cost gifting of property expected to appreciate over that term. When the trust term ends, the remainder interest (after the initial value plus interest is paid back to the trust's grantor) passes to the grantor's children. As long as the grantor survives the GRAT term, the amount that passes to the children is out of the grantor's estate and no longer subject to estate tax.
Current interest rates make GRATs particularly advantageous at this time.
Listen as our panel of experienced estate planning attorneys discusses best practices for maximizing the benefits of GRATs.
- Structuring GRATs
- Regulatory and statutory requirements
- Impact of interest rates and depressed assets
- Tax consequences for GRATs
- Gift tax implications
- Estate tax implications
- Generation-skipping transfer tax implications
- Income tax implications
The panel will review these and other key issues:
- What are the statutory and regulatory requirements for structuring GRATs?
- How do the current interest rates and asset values impact the viability of GRATs?
- What are effective planning approaches for using GRATs?
Learning Objectives
After completing this course, you will be able to:
- Understand the gift, estate, and income tax implications of GRATs
- Recognize generation-skipping transfer tax implications stemming from GRATs
- Understand how the current interest rates and asset values impact the viability of GRATs and tax planning
- Field of Study: Taxes
- Level of Knowledge: Intermediate
- Advance Preparation: None
- Teaching Method: Seminar/Lecture
- Delivery Method: Group-Internet (via computer)
- Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
- Prerequisite: Three years+ business or public firm experience preparing complex tax forms and schedules, supervising other preparers or accountants. Specific knowledge and understanding of pass-through taxation, including taxation of partnerships, S corporations and sole proprietorships, qualified business income, net operating losses and loss limitations; familiarity with net operating loss carry-backs, carry-forwards and carried interests.
Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.
