December Interest Rates for GRATs, Sales to Defective Grantor
Trusts, Intra-Family Loans and Split Interest Charitable
Trusts
Important federal interest rates continue to rise. The December
applicable federal rate ("AFR") for use with a sale to a
defective grantor trust, self-canceling installment note
("SCIN") or intra-family loan with a note having a
duration of 3-9 years (the mid-term rate, compounded annually) is
3.07%, up from 3.04% in November.
The December § 7520 rate for use with estate planning
techniques such as CRTs, CLTs, QPRTs and GRATs is 3.6%, holding
steady from November. The relatively low § 7520 rate and AFR
continue to present potentially rewarding opportunities to fund
GRATs in December with depressed assets that are expected to
perform better in the coming years.
