Stites on Estates is off to a fun start, and we’ve written a series on grantor retained annuity trusts.

Part 1 provides a brief overview of how GRATs work.

Part 2 provides a case study of how an entrepreneur in a very risky, high payoff, “long shot” business setting could use a GRAT to improve his risk-adjusted net-of-tax returns on entrepreneurship, while still retaining enough upside to amply fund retirement spending if the venture worked out.

Part 3 offers another case study of using GRATs for somewhat less risky ventures that produce reasonably predictable cash flows — repeating liquidity events.  For example, an author could fully fund his current lifestyle needs, while keeping the government away from his wealth-building for the benefit of his descendants.

The case studies in the series show how changed conditions — a much higher estate tax exemption — offer new opportunities to put familiar tools like GRATs to different, creative, and productive uses.

GRATs thrive on volatility, and, as Robert Frank noted in his recent book The High-Beta Rich, the circumstances of the top 1% to 10% of the income and asset distribution are becoming more volatile than they used to be.  Visit Stites on Estates if you’re able, and consider how GRATs might be a useful part of planning for uncertain business upside.


The Conversation Continues at Stites on Estates

by Carter Ruml on April 9, 2014

On January 6, 2014 I joined Stites & Harbison PLLC as a Member, leading the Trusts & Estates practice in their Louisville office.  I’m very excited to continue the conversation started at at Stites on Estates, published by me and my colleagues David Porter and Richard Wehrle, and which launches tomorrow.  Thank you for your continuing readership and support.  Please do visit Stites on Estates often.

KYEstates will remain available as a resource for readers, and also because the pictures from Spring Break, Florida, 1948 are too fun to take down!

Careers develop in unexpected ways.  I appreciate the fine lawyers and professionals at Wyatt and PNC who taught me a lot, and remain close friends.


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