How a Grantor Retained Annuity Trust Freezes Your Estate Tax

Episode 18 of Estate Planning with Fexingo dives into the Grantor Retained Annuity Trust (GRAT), a powerful estate-planning tool that lets you transfer appreciation on assets to heirs with minimal gift tax. Hosts Lucas and Luna walk through how a GRAT works, using the example of a $10 million stock portfolio expected to grow at 8 percent annually. They explain the 'zeroed-out' GRAT strategy popularized by tax attorneys and used by billionaires like the late Sheldon Adelson to pass wealth tax-free to children. The episode covers the annuity payment structure, the IRS Section 7520 rate (currently around 4.6 percent as of May 2026), and the risk that the grantor dies during the trust term, causing inclusion back in the estate. Lucas and Luna also compare GRATs to other freeze techniques like installment sales to intentionally defective grantor trusts. If you've accumulated assets you expect to appreciate and want to lock in today's value for estate-tax purposes, this episode explains why a GRAT might be your best option. No fluff, just the mechanics and trade-offs you need to know. #GrantorRetainedAnnuityTrust #GRAT #EstatePlanning #EstateTax #WealthTransfer #TaxStrategy #IRS7520Rate #SheldonAdelson #AssetAppreciation #TrustPlanning #Finance #FexingoBusiness #BusinessPodcast #EstateFreeze #AnnuityPayment #GiftTax #IntentionallyDefectiveGrantorTrust #LucasAndLuna Keep every episode free: buymeacoffee.com/fexingo