Here's what the wealthy are doing with their estate planning during the COVID-19 crisis:
The 7520 rate is what makes a difference in having this strategy work. The IRS releases these rates on a monthly basis for the following month. Currently the May 2020 rate is 0.8%. From a historical perspective, it is incredibly low. A year ago, in May of 2019, the rate was 3.2%. The lower the rate, the more likely the GRAT has a higher chance of success.
That is where the current market makes a GRAT even more interesting. During the Covid-19 crisis, the S&P 500 was down over 30% at one point. But Blackrock found that since 1982 the one-year performance of US stocks in a year following a bear market averaged 41.1%. As this strategy allows appreciation to pass to the beneficiaries at the end of the GRAT term, the upside potential of putting a GRAT into work can be quite high.
“In the past, I have had clients who have had GRATs and had the stock underperform the hurdle rate. In those instances, the grantor client received back all of the assets of the trust and the other beneficiaries did not receive anything,” explains Burns “The consequence to the Grantor was the cost of preparing the documents.”
Malaysia Latest News, Malaysia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
A surprising way you may risk getting Covid-19'Additional respect emerges for the highly contagious nature of Covid-19' after looking at the findings of a CDC report that traced how the coronavirus outbreak started in a Washington state community back in March, Kent Sepkowitz writes for CNNOpinion
Read more »
China's Wuhan conducted 113,609 COVID-19 tests on May 15: officialsThe city of Wuhan, the original epicentre of the new coronavirus outbreak in China, conducted 113,609 nucleic acid tests on May 15, the local health authority said on Saturday.
Read more »
J. Cole's Dreamville Festival Cancels 2020 Event Due to COVID-19“Although we originally hoped it would be possible to bring you the festival this August, the ongoing uncertainty has made this timeline no longer possible”
Read more »
Feds warn of attacks related to bogus COVID-19 conspiracy theoryWhat started as a bizarre, bogus conspiracy theory involving COVID-19 in Britain has U.S. officials worried about the possibility for real-world violence.
Read more »