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Eileen M. Carrero, CPA
Financial Advisor, CPA
Eileen Carrero Financial Services, LLC
Wealth Management, Tax & Accounting
4917 West 144th Place
Midlothian, IL 60445
Phone: 708-489-1035
Fax: 708-489-1036
Email: eileen.carrero@ceterafs.com
Website: www.myecfs.com
July/August 2025
GRATs: A Handy Wealth-Transfer Tool
A grantor-retained annuity trust (GRAT) is an estate strategy that may minimize tax on large financial gifts to family members and help your estate avoid using much, if any, of your lifetime gift and estate tax exclusion.
Structure
With a GRAT, you place appreciating assets into an irrevocable trust and receive an annual income from the trust for a specified period.When the trust expires, your beneficiary receives the remaining assets with little or no gift-tax consequences to your estate. You select whether income payments will come from asset earnings or be based on a percentage of the total value of the trust assets.
Caution
Your beneficiary receives nothing, however, if you die before the GRAT expires. Instead, the assets become part of your taxable estate, negating the trust benefits. So, take care when choosing a trust period.Professional financial and legal help is essential when considering a trust, particularly an irrevocable trust. You can't easily undo a irrevocable trust if you later change your mind or make a mistake creating it.
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