With a GRAT, the investor makes himself or herself the beneficiary of an annuity payment from the trust for a fixed number of years selected by the grantor. The investor must survive the GRAT term, after which the assets pass to the designated recipients. It is possible to structure the GRAT so that no gift tax is paid when it is formed. If a gift tax is payable, it is likely to be much lower than the estate tax that would be imposed if the GRAT assets remained in the estate.

Why are Wien & Malkin investment interests particularly useful for GRATs? There are several reasons. For starters, GRATs work well with investments with strong cash flow, and our investments characteristically accommodate that need by providing high current yields. In addition, interests in Wien & Malkin investments typically qualify for minority interest and lack of marketability valuation discounts, which may substantially raise the effective yields.

This factor allows the GRAT to be structured for a relatively short period of time - an important consideration in view of the fact that the owner of a GRAT must survive its entire term in order to pass the assets to the intended beneficiaries. If the grantor does not survive, the assets in the GRAT become part of the grantor's estate.

Of course, circumstances vary for every taxpayer. Consult your legal and financial advisors to determine whether a GRAT containing Wien & Malkin partnership interests is appropriate for you.