Bessemer Trust Bank prepared a PDF outline regarding the main changes that Grantor Retained Annuity Trusts (Grats) are going to have under the small business and infrastructure Jobs Tax act which. Assuming it passes in the senate it will then be signed by the President and provide that the minimum term would be a ten year Grat. It will also provide that the payments may not decline during any future year. These rules are designed to significantly minimize those who are seeking to game the system through a series of short term Grats they were confident to live past or have minimal inclusion or were able to time the market more in seeking to reduce their tax exposure. The law will not be retro active but will only impact the ability to do a GRAT without the restrictions after the law becomes law if that occurs so the planning opportunity still exists but may not shortly.
To read further the Bessemer Trust summary click here.