Boca Raton Trust Attorney

Helping Families Establish Grantor Retained Annuity Trusts (GRATs)

A Boca Raton trust attorney at Ellis Law Group can provide you experienced legal advice for establishing a Grantor Retained Annuity Trust (“GRAT”).  Our legal professionals take the time to understand your individual needs, as well as those of your loved ones, and help you make an informed decision. Contact us today to discuss your options. 

What Is a Grantor Retained Annuity Trust?

A Grantor Retained Annuity Trust (“GRAT”) is a specific type of Irrevocable Trust. A GRAT is generally created by transferring one or more high-yield assets into an irrevocable trust and retaining the right to an annuity interest for a fixed term of years (or for the shorter of a fixed term of years or for your lifetime).  When the annuity period ends, the assets in the trust (including any appreciation) go to the remainder beneficiaries.

What Are the Benefits of a GRAT?

The “magic” of the GRAT is that the Internal Revenue Service assumes that assets grow at the IRC 7520 rate.  This rate is generally between 2-4%. Therefore, any appreciation of the assets in excess of this rate will pass to the beneficiaries free of estate and gift tax.  If you were to pass away during the term of the GRAT, the value of the assets would be included in your estate and you we be in the same position before the use of the GRAT.

The benefits of GRATs can also be leveraged by placing assets into the GRAT that may be subject to valuation discounts such as minority interests, interests in closely held businesses, etc.

Consult an Experienced Boca Raton Trust Attorney Today

The lawyers at Ellis Law Group have a firm understanding of the complexities surrounding Grantor Retained Annuity Trusts and aim to help you and your loved ones make the best decision possible regarding your assets.  We will review your individual circumstances and advise you on your legal options so you can gain a full understanding of GRATs and whether or not this type of trust is the right one for you. To speak with a Boca Raton trust attorney today, call our firm at  561-910-7500 or contact us online.