Improving Tax Management of Grantor-Retained Annuity Trusts

Overview

In light of the current economic downturn and renewed possibility of rising tax rates, there has been a noted increase in the use of grantor-retained annuity trusts (GRATs). Although this type of trust poses some nuanced income and capital gains tax management concerns, they can reduce the tax load through proper management. When used correctly, they can also allow grantors to gift appreciated assets tax-free.

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