Tax Law Update

House passes bill to restrict GRAT terms On March 24, the House passed H.R. 4849, the Small Business and Infrastructure Jobs Tax Act of 2010, which includes an amendment to Internal Revenue Code Section 2702 imposing a minimum term of 10 years for grantor retained annuity trusts (GRATs). Under IRC Section 2702, if an individual transfers an interest in a trust to a family member while retaining an

David A. Handler, partner in the Chicago office of Kirkland & Ellis LLP, and Alison E. Lothes, as | Jun 01, 2010

House passes bill to restrict GRAT terms — On March 24, the House passed H.R. 4849, the Small Business and Infrastructure Jobs Tax Act of 2010, which includes an amendment to Internal Revenue Code Section 2702 imposing a minimum term of 10 years for grantor retained annuity trusts (GRATs). Under IRC Section 2702, if an individual transfers an interest in a trust to a family member while retaining an interest in the same trust, the value of the retained interest is zero,

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