GRAT 'n' GiftGRAT 'n' Gift

Glenn Kurlander, senior vice president and director, Family Wealth Advisory Services, and Gary J.

A wealth planning professional would have had to be living on Mars not to know that Internal Revenue Code Section 7520 rates dipped to historic lows in the summer of 2003² and stayed low through 2004. How low did the rates go? The average Section 7520 rate in 2003 — 3.8 percent — is exactly one-half the average of rates since May 1989,³ when the Section 7520 rate first became the applicable discount rate for determining the present value of an annuity, an interest for life or a term of years, or a remainder or reversionary interest.⁴

Section 7520 rates are likely to increase.⁵ It's even more likely that clients who did not create grantor retai...