Wealth Management Update

December Interest Rates for GRATs, Sales to Defective Grantor Trusts, Intra-Family Loans and Split Interest Charitable Trusts

Federal interest rates increased slightly for December of 2021 but remain fairly low historically. The December Section 7520 rate for use with estate planning techniques such as CRTs, CLTs, QPRTs and GRATs is 1.6%, which is 0.2% higher than the November rate. The December applicable federal rate ("AFR") for use with a sale to a defective grantor trust, self-cancelling installment note ("SCIN") or intrafamily loan with a note having a duration of three to nine years (the mid-term rate, compounded annually) is 1.26%, up slightly from 1.08% in November.

The AFRs (based on annual compounding) used in connection with intrafamily loans are 0.33% for loans with a term of three years or less, 1.26% for loans with a term between three and nine years and 1.90% for loans with a term of longer than nine years. With the short and mid-term rates