Explain the benefits of the grantor retained annuity trust (GRAT) that the case mentioned Robert is planning to create. CHOOSE ALL that apply.

Explain the benefits of the grantor retained annuity trust (GRAT) that the case mentioned Robert is planning to create. CHOOSE ALL that apply. If he dies before the end of the GRAT the assets in the GRAT will be included in his taxable estate. Robert will need to live at least 10 years after the GRAT is established for this to be a viable estate planning technique. The GRAT will provide a remainder interest to the Franklins children as long at the GRAT returns are less than the 7520 rate for the term of the GRAT. If he did not use the GRAT, and did an outright transfer he would need to use $3 million of his lifetime exemption. Since the GRAT is a grantor trust the income in the trust will be taxable to Robert and the trust will not have to pay taxes. Robert will be able to transfer $3 million of value of property plus appreciation and only use $1 million of his lifetime exemption. If he dies after the end of the GRAT the assets in the GRAT will be included in his taxable estate