Grat News!

People should do planning now while the opportunity still exists.

July offers a GRAT opportunity to make some strategic estate planning moves. The IRS just published the applicable federal rates (AFR) for July:

• Section 7520 Interest Rate: 2.4%

• Applicable Federal Mid-term, Annual Rate: 2.0% These rates continue to slide, and are set now at historical lows. These low rates make certain estate planning opportunities much more attractive, to include:

• loans to family members • installment sales to grantor trusts

• grantor retained annuity trusts (GRATs) and

• charitable lead annuity trusts (CLATs).

A recent article in Forbes focuses primarily on the GRAT opportunity for savvy planners. As Forbes writes, GRATs are particularly attractive now, with low AFRs, under-valued assets (particularly real estate) and the ability to create a GRAT with a term as short as three years.   

Here’s why the low rates make GRATs such a good deal. The idea with a GRAT is to transfer an appreciating asset into a trust for a set number of years, say three years. After the three years, any appreciation over the applicable federal rate goes to your heirs, free of estate and gift tax. So, if you own rapidly appreciating assets, particularly if they are currently under-valued, and you anticipate the three-year appreciation to exceed the low AFR, then this strategy could result in some GRAT tax savings.

Reference: Forbes (June 28, 2011) “A GRAT Opportunity: Taking Advantage of Low July 2011 AFRs

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We've been putting together as many resources as possible so that we can continue to help:

  • If you’re a current client with a signing appointment or a prospective client with a consultation and would prefer that meeting take place in your own home, we can accomplish that with a little bit of pre-planning on our part and with the addition of a laptop, smartphone, tablet or other computer in your home to facilitate this virtual meeting. For those of you that need to sign legal documents, that too can be accomplished with the use of a webcam (FaceTime etc.), so that we can witness and electronically notarize all of your important legal documents.
  • We launched the rollout of our on-demand webinar early so that new clients and our allied professionals can view the important component parts of ‘an estate plan that works’ at their convenience.  That is available on our website.
  • Live video workshops will be produced as quickly as possible and certainly ahead of our previous schedule; we will keep you posted as these events become available. Given the ‘boutique’ nature of the firm, we rarely have more than ten people in our office including team members at any one time. During this period of ‘social distancing,’ we promise to have no more than 8 people at any time.   This allows us to comply with the Governor’s directive to limit in-person gatherings.
  • The best way to communicate with us is still by phone during regular office hours of 8:30 to 5:00, Monday through Friday, or, you can email any of our team members (that is, their first name followed by @zarembalaw.com).  We will respond to these emails as quickly as possible.
  • Please continue to follow the directives of our local, state, and federal agencies. For your health and in consideration of our team who is assisting you, if you’ve scheduled an office appointment or planned to drop off paperwork and are experiencing a fever, dry cough, or shortness of breath, please contact your primary care doctor for guidance and then our office to reschedule.

Thank you, Walt and the Zaremba Team

Update to our Process

The unprecedented coronavirus pandemic has taken our entire country by surprise. We understand how difficult this time is for America’s businesses and families.  However, we believe it is vitally important that we make every effort possible to continue to offer solutions that avoid disrupting our important partnership with you, your family and friends.  As you know, estate planning is not something that should wait for a more convenient time, therefore the opportunity to address your important goals both during and after this crisis should not wait.  To that end, we have added the option of a ‘virtual consultation’ to our office process.  You will now have a choice of either meeting with us in our office or in the comfort of your own home.