Mar 1, 2008 12:00 PM

By David L Weinreb & Warren Litman

A combination of tax-free gifts to grantor trusts and “rolling” grantor-retained annuity trusts (GRATs) can be a powerful way to transfer wealth. Sophisticated quantitative modeling and capital markets forecasting demonstrate that even a client with a very large estate may be able to satisfy all of his wealth transfer goals using just these straightforward strategies.

Consider a 60-year-old couple with $100 million from the sale of a successful closely held business. Call them John and Jane Rich. The Riches, who have two married children and six grandchildren, want to minimize the taxes that will be paid on their estates to get as much money as possible to their descendants. To accomplish this goal, they're willing to transfer wealth during their lifetimes — but only to the extent that they're assured of always having enough to maintain their lifestyle, which requires $2 million per year (growing with inflation). Can they achieve their objectives using only tax-free gifts to grantor trusts¹ and GRATs?² The answer is “yes.”

Topics of Interest

Estate Tax	Donor Advised Funds
GSTs	Family Offices
Private Foundations	Life Insurance
2010 Tax Act News	Industry Trends Surveys

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Topics of Interest

Estate Tax	Donor Advised Funds
GSTs	Family Offices
Private Foundations	Life Insurance
2010 Tax Act News	Industry Trends Surveys

E-Newsletter Signup

2011 Trust Glossary

Click here to download the 2011 Trust Glossary

50 Years Ago This Month

Click here to read the issue.

50 years ago, in May 1962, we featured articles such as: "Future of Canadian Trusteeship" by Arthur H. Mingay", "Training Trust Employees" by Ian M. Marr, "What is a Trust Officer?" by Eric J. Brown, and "Selling Services" by Donald I. Webb.

Conrad Teitell's Guide to Tax Benefits For Charitable Gifts

Click here to view the most up to date guide (September 2011)

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