Urgent Announcement -Proposals to Amend Key Provisions of the Internal Revenue Code

On May 11, 2009, the White House announced its proposals to amend key provisions of the Internal Revenue Code. Among these proposals is a plan that would negatively affect the lifetime gifting technique known as the grantor retained annuity trust, or “GRAT.” If the White House proposal on GRATs does become law—which could happen soon—it may significantly inhibit the ability of some transferors who create GRATs subsequent to the date of enactment to utilize the strategy effectively. Therefore, those who are interested in setting up a GRAT should consider doing so as soon as possible.

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