2036-1 in the final and proposed regulations provide detailed guidance on the portion of charitable remainder trusts (CRTs) and grantor retained income trusts (GRITs) that must be included in a grantor's gross estate.
2036 alone covers the inclusion and valuation of two types of grantor trusts in a decedent's gross estate: charitable remainder trusts and grantor retained income trusts.
The use of Grantor Retained Income Trusts
(GRITs), Grantor Retained Annuity Trusts (GRATs) and Grantor Retained Unitrusts (GRUTs) can be used as effective tools in estate planning for S Corp shareholders.
In 1985, the O'Reillys donated 20 shares of stock in their closely held corporation to various grantor retained income trusts
with terms of two to four years.
Some techniques that still work after the implementation of Chapter 14 include private annuities (which never had broad appeal but do have beneficial uses in certain situations J), grantor retained income trusts for personal residences, tangible property trusts and grantor retained annuity and unitrusts.
Thus, a family business owner previously was able to transfer S stock into a grantor retained income trust (GRIT) and retain the income from the S stock for 10 years and make a gift valued at only 39% of the stock's value.
Qualified personal residence grantor retained income trusts
(residence GRITs) are perhaps the most universally applicable and attractive gift planning device currently available for clients.
In the case of a QPRT, the amount of the gift is calculated under the more favorable valuation tables that applied to grantor retained income trusts
before the enactment of the Chapter 14 rules.
Transfers in trust, including grantor retained income trusts