Donald M. Thompson - Wills, Trusts, and Estate Planning

WILLS, TRUSTS, AND ESTATE PLANNING

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Grantor Retained Unitrust (GRUT)

See Grantor Retained Annuity Trust (GRAT). The GRUT is the same type of trust as a GRAT except instead of an annual payment which is set upon creation of the trust the payment is specified as a fixed percentage of the value of the trust assets determined annually. Because of this the GRUT does not have the same potential for discounted giving. In a GRAT if the trust assets earn more than the rate of return used by IRS in determining values, property passes to the remaindermen free of gift tax. In a GRUT if the trust earns more than the payout rate the earnings stay in the trust, increase the value of the trust assets, and increase the payment the next year, with a consequent lessening of the remainder value.

 

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Donald M. Thompson * 55 W. Monroe #3950; Chicago, IL 60603
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