Antelope Valley Estate Planning Law Firm Says Now Is The Time To Consider A Grantor-Retained Annuity Trust


Antelope Valley estate planning law firm Thompson Von Tungeln says that now is the time to consider creating a Grantor-Retained Annuity Trust (GRAT) as part of your estate plan. These little known estate planning tools are the subject of an Obama Administration budget proposal that will restrict their use in the future.

"Grantor-Retained Annuity Trusts are an excellent tool for passing along the appreciation of assets to heirs, free of gift tax," said Kevin Von Tungeln, partner at Thompson Von Tungeln and a Certified Estate Planning Specialist. "With asset values depressed because of the economic climate, and historically low interest rates, this may be a once-in-a-lifetime opportunity to establish a GRAT."

If the grantor of a GRAT dies during while the GRAT is in effect, the assets of the trust become part of the grantor's estate and are subject to the 45% estate tax. That is why many wealthy individuals are creating short-term trusts of 2-3 years in length, which reduces the risk of the grantor dying during the term of the GRAT. The Obama Administration proposal establishes a minimum 10-year life of a GRAT, which will make GRAT's much less popular with older individuals.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Kevin L. Von Tungeln, Thompson | Von Tungeln, A P.C. | Attorney Advertising

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