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Rogelio Gonzalez, CRPC®, CSRIC™
Financial Advisor, Prudential Advisors
Pacific Northwest Financial Group
1700 SE Mile Hill Drive, Suite 264
Port Orchard, WA 98366
Phone: 360-919-4271
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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Securities and investment advisory services offered through LPL Enterprise (LPLE), a Registered Investment Advisor, Member FINRA/SIPC, and an affiliate of LPL Financial.
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