Also note that we would not recommend taking on a single-stock position for the purposes of executing a GRAT
strategy, but to the extent that you have made the decision to hold it, it becomes the best asset to place in a GRAT
But what if a client wanted to structure a GRAT
term to complement other estate planning techniques?
A client could be a candidate for GRAT
consideration if he or she has:
First, a short-term GRAT
minimizes exposure to the risk that the senior family member will die during the term, which, as stated above, would cause all or a portion of the value of the GRAT
assets to be included in the senior family member's gross estate.
Only the value of the remainder portion of a GRAT
or GRUT is treated as a taxable gift.
When the transferor retains an annuity or similar interest in the transferred property (as in the case of a GRAT
or GRUT), the transferor is not selling the transferred property to a third party in exchange for an annuity because there is no other owner of property negotiating or engaging in a sale transaction with the transferor.
But then came the Greenbook, which proposes that GRATs
have a minimum 10-year term.
The silver lining in this dark cloud is that the reduced value can make it more cost effective to transfer a significant portion of the business to family members using a GRAT
The grantor creates a two-year term GRAT
by contributing a race horse worth $1 million dollars.
Because additions to a GRAT
are prohibited by Regs.
: A GRAT
is a very useful device in today's low-interest-rate environment.
If not used to purchase a replacement property, the trust terminates and the assets are distributed to the trust "term holder" or can be converted to a 1990 act gift trust, such as a GRAT
Of the 3,000,000 shares, 1,000,000 are being offered by the Company and 2,000,000 are being offered by three selling stockholders - the Molina Siblings Trust, the MRM GRAT
903/2 and the MRM GRAT
To the extent practicable, an equal number of shares shall be sold from the Gary Burrell GRAT
and the Judith Burrell GRAT
Additionally, the AFR interest paid under the installment note, which flows back into the grantor's estate, is less than the 120%-of-AFR annuity payment required under the GRAT