As the Internal Revenue Code's Section 7520 rate dropped this year to near-record lows (down to 3.2 percent in May 2008), some estate planners began recommending that clients create long-term grantor retained annuity trusts (GRATs) to lock in a low hurdle rate.1 This may seem commonsensical, like locking in a low mortgage rate on a home loan. But it's probably a bad idea. If one's goal is to transfer relatively volatile liquid assets, such as publicly traded stocks, research shows that a ...

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