Grantor Retained Unitrust (GRUT): Data Input Fields

[Kathleen Reynolds]

#4821

Enter the appropriate values into the data input fields for this calculation model.

• Transfer Date: Enter 1 to 12 to indicate the month for the transfer date and then enter the year of the transfer (mm/yyyy). If you enter a two-digit number such as 90, the program will automatically enter it as 1990. See Transition Period Notes.
• §7520 Rate: The program automatically displays three allowable 120% Midterm Applicable Federal Interest Rates (the current month and two preceding months) and places the rate that is most favorable in this input. You can override the program’s value by entering another rate. In which case, the phrase “Invalid §7520 Rate” appears. In some cases, 30% will appear as a rate. Thirty percent is the default value that appears when there is not a current AFR available for the chosen month. Download or manually update your AFR table. Check our web site at http://www.brentmark.com for an updated list of AFR Rates.
• Calculation Type: Select Life, Term or Shorter.
• Principal: Enter the fair market value of the assets placed in the trust.
• Grantor’s Current Age: Enter a value from 0 to 109 to indicate the age of the person whose life is being used to measure the term of the trust.
• Term of Trust: Enter the number of years the trust will provide income to the grantor.
• Payment Period: Select the payment schedule that should be followed for each year (Annual, Semiannual, Quarterly, Monthly, and Weekly).
• Months Valuation Precedes Payout: Enter a value to indicate the number of full months by which the valuation date precedes the first payout. The program will only allow valid input values according to which Payment Period was selected on the previous input field.
• Percentage Payout: Enter the projected payout (percentage) that should go to the beneficiary during the life of the trust.
• Annual Growth of Payments: Enter the annual growth of annuity payments, (maximum 20%, minimum -99%).
• Annual Growth of Principal: Enter the projected growth rate (percentage) for the principal. This does not affect the Taxable Gift Value. This value is only used for the Economic Schedule.
• Income Earned by Trust: Enter the projected income earned by the trust (percentage). This value is only used for the Economic Schedule.
• With Reversion? Enter whether or not the assets should revert to the grantor’s estate in the event of the grantor’s death during the term of the trust. “Yes” is the most common entry. Trusts which have terms based solely on life expectancy do not include a reversion.
• §2702 Applies? Answer Yes to apply §2702. Typically, the §2702 rules apply when both of these apply:
  • The transfer is to or for the benefit of a member of the transferor’s family.
  • The transferor or applicable family member retains the interest in the trust.

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IMPORTANT NOTE: Mortality table 2010CM was included in version 2022.10 of the software. Table 2010CM reflects longer life expectancies than table 2000CM, and will generally result in life interests worth more, while remainder interests worth less. Once finalized, the new 2010CM table will go in effect on the first day of the first month after regulations have been finalized. If you have a prior version of the software, it is advised to update to the latest version before the transition period ends (see below).

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