GRATs and GRUTs: Evaluating Estate Planning Options

Latest Strategies to Maximize Returns and Minimize Tax in Trust Formation

Recording of a 110-minute CPE/CLE webinar with Q&A

Conducted on Wednesday, October 7, 2009

Recorded event now available

or call 1-800-926-7926
Program Materials

This seminar will provide accounting firm advisors to high-net-worth clients with a current framework to evaluate tax compliance requirements in forming GRATs and GRUTs, and offer strategies for tax and investment planning using those trust structures.


Estate tax planning using GRATs and GRUTs has been a viable option for years for wealthy clients seeking to pass on wealth with minimal tax impact. If set up correctly, those trusts can afford their grantors a reduced gift tax liability, while the underlying assets continue to grow in value.

The current economic environment offers new wrinkles and new opportunities. For example, while current low interest rates can provide increased tax benefits for the grantor, shaky market conditions can result in assets failing to appreciate, effectively negating the tax benefits of the trust.

To leverage GRATs and GRUTs for their maximum potential in tax savings and wealth accumulation, advisors must grasp the complexities of the Internal Revenue Code regulations governing trust formation. At the same time, they must plan an investment strategy that will guarantee returns over time.

Listen as our panel of experienced estate planning advisors outlines their successful strategies for maximizing the benefits of GRATs and GRUTs.



  1. Definition of GRAT and GRUT
    1. GRAT: Grantor retained annuity trust
    2. GRUT: Grantor retained unitrust
    3. Basic structure and tax benefits for both GRATs and GRUTs
  2. Forming GRATs and GRUTs
    1. Irrevocable nature
    2. Determining qualified interest
    3. Amount to be paid out from assets
    4. IRC regulations
  3. Tax consequences for GRATs and GRUTs
    1. Gift tax implications
    2. Estate tax implications
    3. Generation-skipping transfer tax implications
    4. Income tax implications
    5. IRC regulations
  4. Strategies for maximizing benefit
    1. Impact of low interest rates
    2. Making the most of GRATs and GRUTs in the current economy


The panel will provide accounting advisors with solutions for the most complex issues that arise during trust planning and formation for high net worth clients, including:

  • Navigating the IRC regulations governing the formation of GRATs and GRUTs, and their tax consequences.

  • Parsing the differences between Grantor Retained Annuity Trusts (GRATs) and Grantor Retained Unitrusts (GRUTs), and determining when each structure is best suited for your client.

  • Improving compliance for GRATs and GRUTs, for estate tax, gift tax, and income tax.

  • Devising strategies to guarantee appreciation of assets parked in GRATs and GRUTs, from real estate to stocks and bonds.


Richard Franklin
Richard Franklin

Pillsbury Winthrop Shaw Pittman

He is an estate planning and trust specialist and frequent speaker on associated topics to ABA and state bar groups. He...  |  Read More

Mark Parthemer
Mark Parthemer
Principal and Fiduciary Counsel, and Regional Manager of Legacy Planning
Bessmer Trust

He speaks and writes frequently on taxation, estate planning, trust law and wealth management topics. Before coming to...  |  Read More

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