Based in Ramsey, NJ, Crowne Point Tax & Wealth Counsel serves clients nationwide with Grantor Retained Annuity Trust (GRAT) planning as part of a layered, coordinated trust architecture built across decades not as a standalone document drafted in isolation. Our legal and tax planning approach combines precise trust structuring with disciplined tax modeling to align each GRAT with your broader wealth transfer strategy.
A Grantor Retained Annuity Trust (GRAT) is an irrevocable trust to which you contribute an asset while retaining a fixed annuity payment for a defined term. At the end of that term, appreciation above the applicable IRS hurdle rate the Section 7520 rate in effect at funding can pass to beneficiaries with little or no additional gift tax, depending on how the trust is structured.
The basic concept is straightforward: when the contributed asset grows faster than the applicable Section 7520 hurdle rate, the excess appreciation can pass to beneficiaries outside the grantor’s taxable estate. A properly structured zeroed-out GRAT is designed so the present value of the retained annuity closely matches the value transferred to the trust.
GRAT planning can be particularly useful for assets expected to appreciate significantly, including pre-IPO equity, closely held business interests, concentrated stock positions, and certain real estate. The potential benefit comes from transferring future appreciation when the asset’s expected growth may exceed the applicable Section 7520 hurdle rate.
No two GRATs should be structured identically. We design each Grantor Retained Annuity Trust around the specific asset being contributed, the family's transfer goals, and the interest-rate environment at funding — matched to the broader SLAT, IDGT, and dynasty trust architecture already in place.
The asset going into a Grantor Retained Annuity Trust determines how much wealth can ultimately transfer tax-free. We help you identify the right assets and coordinate the valuations that support defensible GRAT funding.
How a GRAT is funded and reported determines whether it withstands IRS scrutiny. We coordinate the full funding process and prepare the gift tax return that starts the statute of limitations running.
GRAT Tax Planning does not end at funding. We provide the annual trust administration, annuity payment tracking, and structure reviews that keep each Grantor Retained Annuity Trust on track across its full term.
A Grantor Retained Annuity Trust is a powerful instrument — and an unforgiving one when it is misstructured. These are the elements no GRAT Planning engagement can overlook.
Mortality risk — if the grantor dies during the GRAT term, the trust assets are pulled back into the taxable estate. We address this through term length selection, rolling GRAT strategies, and coordination with life insurance planning
Hurdle rate environment — the Section 7520 rate sets the bar the asset must clear for any tax-free transfer to occur. GRAT Tax Planning in a low-rate environment is more powerful; we model the impact of the current rate before every funding decision
Zeroed-out structuring — a properly zeroed-out GRAT uses the IRS actuarial tables precisely, so the taxable gift on funding is effectively nil. Errors in this calculation can create unintended gift tax exposure
Valuation defensibility — for closely held assets, the contribution value must be supportable under IRS scrutiny. We coordinate independent appraisals and document the valuation basis before funding
Adequate Form 709 disclosure — proper gift reporting on GRAT funding starts the statute of limitations and is essential to a defensible structure
GRAT planning is designed for families, founders, and business owners with specific asset profiles and wealth-transfer goals not a one-size-fits-all estate plan. Based in Ramsey, NJ, Crowne Point Tax & Wealth Counsel serves qualifying clients nationwide.
Pre-IPO founders and executives holding equity expected to appreciate sharply before or after a registration statement, where a GRAT funded at current valuation can transfer that appreciation tax-free
Closely held business owners approaching a sale who want to shift anticipated deal appreciation out of their taxable estate before a transaction closes
Families with concentrated stock positions in publicly traded companies seeking to transfer future appreciation through a rolling GRAT strategy
Multi-generational families building a layered architecture of SLAT, GRAT, IDGT, and dynasty trust instruments, where the Grantor Retained Annuity Trust plays the appreciation-transfer role
Nik Agharkar integrates legal drafting with tax modeling and wealth-transfer strategy in each engagement.
GRAT strategies sit within a layered architecture that includes SLATs, IDGTs, and dynasty trusts, not a standalone document service
Every GRAT funding is supported by independent appraisals and Form 709 reporting built to withstand IRS scrutiny
We accept GRAT Tax Planning engagements for the full trust term and beyond, including remainder distribution to beneficiaries
Licensed to practice law in New Jersey, Crowne Point Tax & Wealth Counsel is based in Ramsey and serves clients nationwide where permitted by applicable laws and regulations.
Schedule your free strategy session with Nik Agharkar to explore whether a properly structured GRAT strategy fits your wealth-transfer goals and could help transfer future appreciation with little or no gift tax, depending on the structure and circumstances.