As interest rates rise and market volatility lingers, many estate planning strategies that once thrived in a low-rate environment are being prematurely discarded. But one tool should not be tossed aside: The grantor retained annuity trust remains a valuable and underused strategy — even with higher interest rates.
Over the past two decades, some of the wealthiest families in America have leveraged GRATs to transfer wealth to the next generation with minimal or no gift tax. The Walton family reportedly used rolling GRATs to shift billions in Walmart stock, while the Koch family has applied similar methods in closely held entities. Bill Gates and Warren Buffett, although known for their philanthropic giving, have also engaged in GRAT planning to balance family legacy and charitable goals.
Our Chief Tax Strategist Jeff Getty shared with ThinkAdvisor how these examples illustrate that GRATs are not theoretical tools — they are tested strategies used at the highest levels of private wealth planning.