Wealth Management Update

May 2024 Interest Rates for GRATs, Sales to Defective Grantor Trusts, Intra-Family Loans and Split-Interest Charitable Trusts

The May Section 7520 rate for use in estate planning techniques such as CRTs, CLTs, QPRTs and GRATs is 5.40%, an increase from the April rate of 5.20%. The May applicable federal rate (“AFR”) for use with a sale to a defective grantor trust or infra-family loan with a note having a duration of:

• 3 years of less (the short-term rate, compounded annually) is 4.97%, up from 4.89% in April.
• 3 years to 9 years (the mid-term rate, compounded annually) is 4.42%, up from 4.30% in April.
• 9 years or more (the long-term rate, compounded annually) is 4.55%, up from 4.45% in April.