Good Time to Trim Estates

Tough Times Are Good Times to Trim Estates, The Wall Street Journal points out.

[S]harply lower prices, combined with rock-bottom interest rates, make this an unusually attractive time for many people to transfer wealth to the next generation.

Among the tax-smart strategies advisers are recommending are low-interest loans to other family members and "grantor-retained annuity trusts," or GRATs -- which are designed to transfer assets to family members while minimizing gift and estate taxes. These and other interest-rate sensitive techniques are likely to look even more attractive next month, thanks to even lower rates.

Wealth-holders considering GRATs may want to get a move on. Reform is in the air. In the current Estate Planning Studies, Louis A. Mezzullo writes: "Future legislation…could require that the minimum value of the remainder interest in a GRAT must be at least 10% of the fair market value of the transferred assets."