• Short-Term Grantor Retained Annuity Trust (GRAT)
  • March 8, 2007
  • Law Firm: Bingham McCutchen LLP - Boston Office
  • Here is a simple illustration of how a short-term Grantor Retained Annuity Trust ("GRAT") works. The purpose of the GRAT as we generally structure it is to transfer future appreciation in an asset to children (or in trust for children and others), tax-free. This technique is powerful -- in the last four years our clients have transferred somewhere between $700,000,000 and $1 billion in trust for their children at a total gift tax cost of less than $50,000!