Rolling GRATs Estate Tax Strategy For Texans

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Last Updated: Nov 2, 2024

Read Time: 3 mins

Proper estate planning is vital for Texans who wish to effectively manage their wealth and secure their family’s future. One strategy that stands out is the use of rolling Grantor Retained Annuity Trusts (GRATs) as our Houston, TX estate tax lawyer can explain. In 2024, this approach is especially beneficial for reducing estate taxes, given the current exemption levels and potential changes in tax laws.

Basics Of GRATs

A Grantor Retained Annuity Trust (GRAT) allows you to transfer assets to beneficiaries with minimal gift or estate tax costs. Here’s how it works:

• Assets are transferred into the trust.

• The grantor receives annual payments for a set period.

• Remaining assets go to beneficiaries at the end of the term.

Why Choose Rolling GRATs?

Rolling GRATs involve setting up a sequence of short-term GRATs, typically two to three years each. This approach has several notable benefits, as Stuart A. Green can share who has worked closely with these since founding his firm in 2021:

• Diversifying across multiple GRATs reduces the risk if some assets do not perform well.

• Short-term GRATs can take advantage of market upswings, potentially transferring appreciated assets tax-free.

• They offer flexibility to adjust based on changing financial circumstances and tax laws.

2024 Estate Tax Exemption

For 2024, the federal estate tax exemption is $13.61 million per person. This means individuals can transfer up to this amount without incurring federal estate taxes. However, the Tax Cuts and Jobs Act (TCJA) of 2017, which increased this exemption, is set to expire in 2026. If not extended, the exemption will decrease, potentially increasing the estate tax burden.

Making The Most Of 2024

Given the high estate tax exemption, 2024 is an opportune time to consider rolling GRATs. Key reasons include:

• Leveraging the high exemption to transfer wealth with minimal gift tax implications before the potential reduction in 2026.

• Benefiting from the relatively low IRS Section 7520 interest rates, which can make it easier for GRATs to outperform, transferring more assets tax-free.

• Proactively planning for future legislative changes to lock in current favorable tax conditions.

Steps To Implement Rolling GRATs

Setting up rolling GRATs requires strategic planning and expert guidance. Here’s how to start:

• Consult an experienced estate planning attorney to design a rolling GRAT strategy that fits your goals.

• Identify assets that are likely to appreciate, such as stocks, real estate, or business interests.

• Work with your attorney to create a series of short-term GRATs, transferring selected assets into each trust.

• Regularly review the performance of each GRAT and adjust as needed, rolling assets into new GRATs as terms end.

For Texans aiming to minimize estate taxes and ensure their wealth benefits their loved ones, rolling GRATs present a powerful estate planning option in 2024. By taking advantage of the current high estate tax exemption and preparing for potential changes in 2026, you can protect your family’s financial future. Consulting with a knowledgeable estate planning attorney is essential to successfully implement this strategy and achieve your financial objectives. Contact Stuart Green Law, PLLC to get started today; he is licensed in Texas, Kentucky, Pennsylvania, and South Dakota.

The Stuart Green Law Approach

A Modern Approach to Family Wealth

Stuart Green Law combines modern South Dakota trust law with integrated estate planning, wealth management, and fiduciary services for families throughout the United States and internationally. The firm’s approach is built around selecting the strongest legal framework available, maintaining continuity of planning judgment, and bringing every part of the family’s wealth strategy into alignment with its long-term objectives.

South Dakota Law,
Wherever You Live

Families are not limited to the trust laws of their home state. Stuart Green Law integrates South Dakota’s sophisticated legal framework into estate plans for clients across the United States and around the world, allowing families to benefit from its privacy, flexibility, asset protection, and long-term trust advantages regardless of where they live.

Direct Advisory
Relationships

Stuart Green Law is intentionally structured as a boutique practice. Clients work directly with the attorney responsible for their planning, creating continuity of judgment and a deeper understanding of the family’s objectives as the plan evolves over time.

Planning That Works
as One System

Estate planning, tax strategy, wealth management, and fiduciary services are most effective when they operate together. Stuart Green Law integrates these disciplines into a cohesive framework that keeps the family’s wealth aligned with the grantor’s vision, goals, and long-term planning intent.

Client Testimonials

    
 
 
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   Angélique Pfab Green 
 
 
 
 Trustindex verifies that the original source of the review is Google. Stuart Green is incredibly knowledgeable and clearly operates at a very high level. His approach to estate planning and wealth strategy is thoughtful, modern, and well beyond the traditional. You can tell he genuinely cares about helping people protect what they’ve built. Truly impressive work and reputation.
  
 
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   Maria Cardenas Anderson 
 
 
 
 Trustindex verifies that the original source of the review is Google. I had an excellent experience working with Stuart Green on my trust and will documents. From start to finish, he was incredibly responsive, patient, and thorough. He took the time to explain everything clearly, ensuring I fully understood each step of the process. Even after the trust was complete, he guided me on what still needed to be done — something I really appreciated. Stuart’s professionalism and kind demeanor made what could have been an overwhelming experience so much easier. I felt informed and supported every step of the way. I would highly recommend him to anyone looking for a knowledgeable and attentive probate lawyer. Thank you, Stuart!
  
 
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   katelyn rennie 
 
 
 
 Trustindex verifies that the original source of the review is Google. Stuart is outstanding! We have been so impressed with his knowledge.
  
 
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   Chris Stinson 
 
 
 
 Trustindex verifies that the original source of the review is Google. Stuart Green is an exceptional estate attorney. He handled my father's living will and then his estate after his passing, as well as helping my mother finalize and complete her estate in conjunction with my father's death. Currently, he is handling the living will and estate planning for me and my wife and our family. I highly recommend him and his integrity of work.
  
 
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   Alejandra 
 
 
 
 Trustindex verifies that the original source of the review is Google. My experience with Stuart Green Law was a 10/10. They were professional and efficient, resolving my case quickly. I highly recommend them!
  
 
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   Joseph Marchetti 
 
 
 
 Trustindex verifies that the original source of the review is Google. Great guy - honest businessman.  Has been very helpful for me in providing feedback and input from a law perspective on employment and legal agreements in my personal and professional life.  Would heartily recommend Stuart to others!
  
 
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   Will Desrochers 
 
 
 
 Trustindex verifies that the original source of the review is Google. I have worked with Mr. Green for awhile now and can't recommend him highly enough. He is professional and and timely with his responses to my questions. I really appreciate how he helps me understand the plan for my estate. I look forward to continuing to work with him.
  
 
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   Chuma 
 
 
 
 Trustindex verifies that the original source of the review is Google. I’ve learned a great deal from Stuart on the foundational aspects of estate planning, legacy planning and asset protection. Having had the privilege  to work alongside Stuart, I can also say that he is a top tier counselor and focused on aligning his client’s personal goals with their long term objectives and wishes.
  
 
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   Nick Delsignore 
 
 
 
 Trustindex verifies that the original source of the review is Google. Incredible person to know and be associated with. Stuart provides excellent services, that is undeniable. However you will be hard pressed to find another attorney with a truer moral compass.