Overview
Voyant’s latest update introduces the ability to model a rolling Grantor Retained Annuity Trust (GRAT) strategy directly within AdvisorGo. This enhancement allows advisers to illustrate the impact of funding a series of shorter-term GRATs, an approach designed to increase the likelihood of GRAT success when compared to a single long-term GRAT.
Why It Matters
Rolling GRATs are a powerful estate planning tool for high-net-worth clients who want to transfer appreciating assets to heirs while minimizing estate taxes. By modeling multiple GRAT terms that roll over time, advisers can demonstrate the compounding benefits of this strategy, along with its impact on wealth transfer and estate tax reduction, all visually within Voyant’s trust module.
Case Study: Cameron and Amber
Cameron and his wife Amber are successful real estate brokers living in New York City. They have three children, John, Josh, and Jennifer. Much of their wealth is held in investment accounts, and Cameron is ready to begin transferring some of that appreciating wealth to his children during his lifetime while minimizing estate tax exposure.
After meeting with their adviser, Jill, the couple decides to transfer $8.5 million in investments into a Grantor Retained Annuity Trust (GRAT). However, Cameron’s recent health concerns raise an important question: what happens if he passes away during the GRAT term?
Jill explains that if a mortality event occurs during the GRAT’s term, all remaining assets would revert to Cameron’s taxable estate, potentially eliminating the intended estate tax benefits.
To mitigate this risk, Jill recommends a rolling GRAT strategy, a series of three-year GRATs that stop rolling in 2030. This approach increases the probability of GRAT success, allowing assets that outperform the IRS hurdle rate to pass to the next generation with minimal tax impact.
Using Voyant’s Trusts and Legacy views, Jill illustrates how this strategy:
Transfers significant wealth to the next generation.
Reduces estimated estate taxes by $17 million.
Provides a clear visual of annual GRAT activity and rollover timing.
How to Model a Rolling GRAT in Voyant
Create the Initial GRAT
Navigate to the (+) and Select Trusts
From the dropdown select the Grantor Retained Annuity Trust (GRAT).
Enter the funding amount, term length, and annuity payment details.
2. Enable the Rolling Strategy
In the GRAT setup screen, select “Enable Rolling GRAT Strategy.”
Define the term length (e.g., 3 years) and end year (e.g., 2030).
Voyant will automatically model a series of consecutive GRATs based on these settings.
4. Review in Legacy
Use the Legacy screen to demonstrate wealth transfer outcomes and estate tax reduction.
Present to Clients
Use Let’s See > Trusts to visualize GRAT performance year by year.
Discuss how shorter-term GRATs can increase flexibility and improve success rates.
Key Takeaways
The rolling GRAT feature makes it easy to model and visualize advanced estate planning strategies within Voyant.
Advisers can clearly demonstrate the benefits of shorter GRAT terms, potential estate tax savings, and the timing of asset transfers.
This update helps clients better understand the why behind their strategy, reinforcing your value and expertise.