| TABLE 1. Grantor Retained Annuity Trust | ||||||||
| Assumptions: | Grantor's age | 60 | Section 7520 rate (October 2003) | 4.4% | ||||
| Original value of assets | $500,000 | GRAT annuity rate | 53.32476% | |||||
| Annual growth of assets | 8.00% | Marginal gift and estate tax rate | 50% | |||||
| Year | GRAT | Grantor | ||||||
| Begin Year Value ($) |
8% Stock Growth ($) |
Annuity Distribution ($) |
End Year Value ($) |
Begin Year Value ($) |
8% Stock Growth ($) |
Annuity Receipt ($) |
End Year Value ($) |
|
| 1 | 500,000 | 40,000 | -266,624 | 273,376 | — | — | 266,624 | 266,624 |
| 2 | 273,376 | 21,870 | -266,624 | 28,622 | 266,624 | 21,330 | 266,624 | 554,578 |
| Annuity and Growth Returned to Grantor | $554,578 | |||||||
| Transferred to Beneficiaries at End of GRAT term | $28,622 | |||||||
| Gift Resulting From GRAT Formation | — | |||||||
| Estate/Gift Tax if Transfer Made Without GRAT | $14,311 | |||||||