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ARTICLE · 14 MARCH 2014

Grantor Retained Annuity Trusts

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A recent article in Bloomberg estimates that certain estate planning techniques such as the grantor retained annuity trust has cost the US federal government over US$100 billion since the year 2000.

United KingdomTax
Stephen Nerland
Stephen Nerland
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A recent article in Bloomberg estimates that certain estate planning techniques such as the grantor retained annuity trust (GRAT) has cost the US federal government over US$100 billion since the year 2000. The proof of these tax savings is calculated based upon filings which are made with the US Securities and Exchange Commissions (SEC). As an example, the Bloomberg article highlights casino magnate Sheldon Adelson who has given at least US $7.9 billion to his heirs by using a series of GRATs using calculations based on SEC filings, all of which will save him and his estate roughly US $2.8 billion in US tax.

The Bloomberg article also discusses the popularity of the GRAT by detailing other individuals who have used GRATs, such as Facebook founder Mark Zuckerberg and Goldman Sachs CEO Lloyd Blankfein. Although GRATs created by billionaires illustrate pronounced tax savings and make for interesting headlines in newspapers, the GRAT is a very common and effective estate

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