Use GRATS to Transfer An S Corp. to the Kids

The grantor retained annuity trust (GRAT), statutorily allowed by Congress since 1990, can transfer part or all of a wealthy person's business to the next generation, free of gift tax, and in a way that removes the business from estate taxation. A GRAT with a business interest is created by a grantor transferring a portion of his interest into an irrevocable trust and retaining the right to an annuity