Fund the Trust
You contribute assets — concentrated stock, an ETF portfolio, or other liquid investments — into the GRAT. The trust is structured as a “zeroed-out” Walton GRAT, meaning the modeled taxable gift is $0.
Wealth Transfer Strategy
Model a GRAT Wealth Transfer
Model how a zeroed-out Grantor Retained Annuity Trust may move appreciation outside a taxable estate when trust returns exceed the IRS hurdle rate. The illustration includes trust costs, mortality, retained annuity value, and the selected estate-tax scenario.
Monte Carlo GRAT Simulator
Model the range of outcomes across 5,000 reproducible market paths. Annual returns vary by path instead of following one flat growth rate.
Configure Your GRAT
Adjust the trust terms, costs, return assumptions, and estate-tax inputs.
Illustrative only. Not investment, tax or legal advice.Important disclosures
Grantor Age
State
Initial Principal
Asset Type
GRAT Term (Years)
Strategy Horizon (Years)
Rolling 2-year GRATs over 10 years
Annuity Type
§7520 Rate (%)
IRS Sep 2026: 5.4%⚠ Latest rate on file. Confirm this month's rate at IRS.gov
Source: Rev. Rul. 2026-17 · Valuation month: Sep 2026
Death-Date §7520 Assumption (%)
Used only for §2036 inclusion if death occurs during a term; the model assumes death immediately before the annual year-end payment.
Expected Return (μ)
8.0%
Default: 8.0% (long-run equity total return)
Volatility (σ) — Single Stock
30%
Default: 30%. Adjust for concentrated positions.
Successor GRAT §7520 Rate (%)
Rate for successor GRATs in rolling strategy. Stress test: current + 150bps.
No-Strategy Taxable Estate at Comparison Date ($)
Must include the modeled hold-same-asset value and be net of other deductions before state estate tax.
Lifetime Exemption Used ($)
2026 federal exemption: $15M per person (OBBBA, permanently extended)
Trust Costs
Investment Mgmt Fee (bps)
50 bps
Annual AUM-based fee. 50bps = 0.50% of trust assets/yr.
Trustee Compensation ($/yr)
Annual trustee fee. Typical: $5K–$25K for institutional trustees.
Legal & Accounting ($/yr)
Annual legal, accounting, Form 709 prep. Typical: $3K–$8K.
Trust Setup Cost ($/GRAT)
One-time drafting/setup cost per GRAT. Deducted from Day 1 balance.
Blended Tax Rate: 40.0%Survival Prob: 98.7%Taxable Gift: $0 (Walton GRAT)
Discussing the result
Review the illustration with Altar Rock.
Altar Rock can evaluate the investment assumptions and liquidity demands, then coordinate the trust terms with your estate attorney and tax adviser.
Talk with Altar RockHow Altar Rock can help
Asset Selection & Timing
Compare concentrated positions, pre-event stocks, and volatile portfolios based on expected return, volatility, liquidity, and the proposed funding date.
Rolling GRAT Strategy Design
Structuring the term, annuity type, and rolling cadence to match your family's liquidity needs, risk profile, and multigenerational transfer goals.
Tax & Legal Coordination
Coordinate with your estate attorney and CPA on trust documents, IRS filings, and annuity schedules.
Ongoing Monitoring
Track trust performance, manage annuity payments and evaluate whether and when to fund a successor GRAT or transfer gains to beneficiaries.
How a GRAT Works
A GRAT involves funding the trust, receiving annuity payments and potentially transferring a remainder to the next generation.
Receive Annuity Payments
The trust pays you back a fixed annuity each year, calculated to return the full principal over the term when discounted at the IRS §7520 rate. These are annuity payments back to the grantor during the trust term.
Excess May Pass Outside the Estate
In a properly administered zeroed-out GRAT, value remaining after the retained annuity may pass outside the grantor's taxable estate. Underperformance can return assets to the grantor, while legal, administrative, investment, and income-tax costs remain real.
Compare GRAT terms
If you fund a long-term GRAT at a low §7520 rate, that rate applies for its term. Rolling short-term GRATs can isolate return periods and complete transfers sooner, but results depend on path, rates, costs, administration, and survival.
How Volatility Changes GRAT Outcomes
In this illustration, higher volatility widens both favorable and unfavorable modeled outcomes. A zeroed-out GRAT can resemble an option on appreciation above the hurdle, but fees, administration, mortality, and asset losses still matter.
Same 8% expected return
15%
ETF Volatility30%
Single Stock VolatilityHigher volatility widens both favorable and unfavorable modeled outcomes
How Shorter Terms Isolate Return Periods
A single 10-year GRAT can fail even when most years are positive — one severe drawdown can wipe out accumulated gains. Rolling 2-year GRATs segment the path into short windows, with separate completion points every 2 years. Strong completed periods can move value outside the estate. Underperforming GRATs may return remaining assets to the grantor after modeled costs.
- Rolling 2-Year GRATs
- Short windowsMore frequent completion opportunities
- Single 10-Year GRAT
- One pathLonger exposure before completion
Important disclosures
Assumptions & Limitations
Return Model
- Lognormal (GBM) — no fat tails, no serial correlation
- Arithmetic expected return: ETF 8%, σ=15% | Single Stock 8%, σ=30%
- No trading friction or dividend modeling; trust costs are set in the inputs
Mortality
- IRS Table 2010CM, published annual values
- Stochastically applied each year per MC path
- Death immediately before the annual year-end payment; separate death-date §7520 rate
- Graduated-annuity inclusion follows §20.2036-1(c)(2)(iii), capped at date-of-death trust value
Not Modeled
- Grantor income tax on trust income (real cost to grantor)
- Basis / capital gains consequences for heirs (no step-up)
- Payment timing / operational risk (105-day rule)
- Appraisal fees
Estate Tax
- 2026 law held fixed; $15M federal exclusion per person
- Estate is entered before state estate tax and net of other deductions
- State schedules and the federal §2058 deduction are modeled
- No portability, recent-gift addbacks, inheritance tax, marital/special deductions, or property outside the resident state
This calculator is for illustrative purposes only and does not constitute investment, tax, or legal advice. Monte Carlo simulations use randomized market scenarios and do not predict future results. Consult a qualified attorney and tax advisor before implementing a GRAT strategy. Altar Rock LLC is an SEC-registered investment adviser.