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.
TECHNIQUES EMPLOYED TO TRANSFER FUTURE APPRECIATION Pages * Installment Sales 50-53, 446 * Private Annuities 50-53, 496 * Gifts 54-61 * Intentionally Defective Trusts 78-81 * Family Limited Partnerships 178-179, 483 * Recapitalizations 182-185 * Family Holding Companies 429 * Grantor Retained Income Trusts
(GRITs) 437 * Grantor Retained Annuity Trusts (GRATs) 70-73, 437 * Grantor Retained Unitrusts (GRUTs) 437 * Remainder Interest Transactions (RITs) 516
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 noncharitable trusts such as grantor retained income trusts
(GRITs), grantor retained annuity trusts (GRATs), and grantor retained unitrusts (GRUTs), the period for which the payments may be reserved by the grantor must be for a term determined without reference to the grantor's lifetime.
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.
Affected by Chapter 14 are Buy/Sell Agreements (discussion in footnote 3, page 141), Family Holding Companies (discussion on page 427), Family Limited Partnerships (chart, page 179, and discussion on pages 483-484), Grantor Retained Annuity Trusts (chart, page 71), Grantor Retained Income Trusts
(discussion on page 437), Personal Holding Companies (discussion on page 490), Recapitalizations (chart, page 183), and Remainder Interest Transactions (discussion on page 516).
It not only covered the perceived abuse areas, but included many more estate planning techniques such as grantor retained income trusts
(GRITs), joint purchases and buy-sell agreements.
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.
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