Wealth Transfer Strategies for Private Clients

Grantor Retained Annuity Trust “GRAT”

Objectives

• Generate meaningful transfer to beneficiary
• Preserve capital, to extent possible, while meeting primary transfer objective
• Endeavor to minimize taxation of Grantor

Principles

• Create homogeneity of asset mix within each GRAT
• Pursue diversification among GRATs 
  • Seek low correlation with other GRATs
• Introduce leverage and volatility
  • GRAT-friendly characteristics
• Wealth transfer is essentially an option
  • Unsuccessful strategy results in assets remaining in Grantor estate, i.e., no downside to Grantor