Читать книгу 2012 Estate Planning - Martin Inc. Shenkman - Страница 34

GRATs in simple terms are irrevocable trusts to which you as the donor (the one making a gift to the trust) and grantor (this has important income tax implications discussed later) makes a gratuitous transfer of appreciating or high yielding assets. In exchange for this gift, you will be paid an annuity amount each year for a fixed number of years (the GRAT term). The annuity amount is typically based on a percentage of the initial value of the assets you gifted to the GRAT. The amount is typically set at a level that for gift tax purposes reduces the value of the remainder interest (what is left when your annuity ends) in the GRAT to zero or near zero. The result is that any appreciation of the assets inside the GRAT that exceed the mandated federal interest rate used in the calculation will go to the remainder beneficiaries, typically your children, or a trust for their benefit, with no transfer tax cost. Basically, these so-called “zeroed-out” GRATs are a win-win for the taxpayer since, if the GRAT property appreciates at a rate in excess of the IRS hurdle rate, you will have achieved a tax-free transfer of wealth to your children and, if the property fails to achieve that level of appreciation, you are no worse off than had you never created the GRAT in the first place (i.e., because you made no or a minimal taxable gift when creating the GRAT). Over time, the GRAT technique was engineered into a series of rolling or cascading short-term (e.g., two-year) trusts that could capture upside market volatility with no meaningful tax downside. Realizing that a properly designed GRAT is a “win-win” for taxpayers, restrictions have been proposed to limit the usefulness of GRATs. These proposed restrictions include:

•GRATs must have a minimum 10-year term.

•The annuity payment may not be reduced from one year to the next during the first 10 years of the GRAT term.

•The GRAT remainder interest at the time of the transfer must have a value greater than zero.

In 2012, GRATs remain alive and well, and interest rates that determine the size of the annuity that must be paid to the grantor to “zero out” the GRAT (and hence the amount of leakage back into your estate) are at historic lows. As a result, many tax experts are hawking 2012 as the last great GRAT opportunity. While that may be true, as discussed in Chapter 5 and later chapters, for many taxpayers 2012 GRATs may not be the optimal strategy. Like every great tool, GRATs need to be used in the right circumstances only.