Timothy Barry
blumshapiro
One-size-fits-all has never applied to tax planning and that couldn’t be truer during a year when so many additional factors and uncertainties have come into play.
The novel coronavirus pandemic has impacted our lives in many ways, and that includes bringing the reality of mortality to the forefront. As such, it has acted as a trigger point for many to review estate planning strategies.
The low interest rate environment we are now in allows for the use of several techniques to transfer wealth to other family members at substantially reduced gift tax cost.
A Grantor Retained Annuity Trust (GRAT) is one such method. In brief, a GRAT is a financial instrument used in estate planning to minimize taxes on large financial gifts to family members. Under a GRAT, a person transfers property to an irrevocable trust for a specific period of time in exchange for annual annuity payments.