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GRAT and Valuation Planning After CCA 202152018: What Practitioners Need to Know

January 27, 2022 @ 4:00 pm – 5:00 pm EST

Jonathan G. Blattmachr Esq., Scott Nammacher Esq. and Martin M. Shenkman Esq.
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Chief Counsel Advice 202152018 (“the CCA”), released on December 30, 2021, has a critical impact on grantor retained annuity trusts (GRATs). The CCA addresses a common valuation challenge: what consideration should be given to a potential sale in valuing an asset? Often there is a long continuum from no sale, to discussions with potential buyers, to a letter of intent, to a binding contract, etc. Where the business is on this continuum will affect how an appraiser evaluates the possible implications of the potential sale.

In the situation described in the recent CCA, the possible sale had moved too far along the continuum towards an actual sale to have been ignored in the valuation. As a result, the IRS extended the reasoning in the infamous Atkinson case (Estate of Atkinson v. Commissioner, 115 T.C. 26 (2000), aff’d, 309 F.3d 1290 (11th Cir. 2002)), and held that the valuation was so wrong that the GRAT annuity was not a qualified annuity interest under Code Section 2702, resulting in a deemed gift of the entire value of the property involved.

What does this CCA mean to GRAT planning generally? What might this mean to the use of GRATs as valuation spillover receptacles in a defined value mechanism? Might this have implications on other aspects of defined value techniques? What might this CCA mean to valuations generally? Are there new steps and precautions practitioners might choose to take? Might this signal a broader application of the Atkinson principles to GRATs, CRTs, and CLTs (or possibly any valuation at all), even applying those principles to impose valuation penalties? This program will address all of these questions and include a detailed discussion of the CCA, analysis by an expert appraiser of the valuation implications, a discussion of Atkinson, and much more.

Continuing Education Credits

InterActive Legal is not an approved Continuing Education (CE) Sponsor. However, several states and regulatory agencies for a variety of professionals that participate on our teleconferences may still receive continuing education credit for their participation. If a participant wishes to receive CE credit for their participation in these teleconferences, they must apply to receive credit on their own and through their individual states and regulatory authorities. It is the responsibility of the participant to file for CE credit and is not guaranteed by the webinar sponsors.

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Webinar Speakers

Mr. Blattmachr is a Principal in ILS Management, LLC and a retired member of Milbank Tweed Hadley & McCloy LLP in New York, NY and of the Alaska, California and New York Bars. He is recognized as one of the most creative trusts and estates lawyers in the country and is listed in The Best Lawyers in America. He has written and lectured extensively on estate and trust taxation and charitable giving.
Scott Nammacher
Scott A. Nammacher, ASA, CFA is a Senior Managing Director of Empire Valuation Consultants, where he has worked since 1992. He is an Accredited Senior Appraiser (ASA) of the American Society of Appraisers and a Chartered Financial Analyst® (CFA) Charterholder. Scott has extensive experience in financial consulting, business valuations, and acquisitions/divestitures. He has valued a wide variety of publicly and privately held companies for acquisitions, share repurchases, estate and gift tax reporting, recapitalizations, and general corporate planning purposes. Scott has also been involved in the valuation of several hundred hedge and P/E fund interests, including carried interests and related derivatives, and has valued entertainment and artistic-related assets and interests, from copyrights of most types and profit participation interests, to music libraries and other royalty-related assets. Additionally, Scott has testified as an expert witness in several courts and has acted as a litigation valuation consultant.
Martin Shenkman
Martin M. Shenkman is an attorney in private practice in Fort Lee, NJ, and New York City.  His practice concentrates on estate and tax planning, planning for closely held business, and estate administration.  Mr. Shenkman is an author of over 42 books and more than 1,000 articles.  He is an editorial board member of Trusts & Estates Magazine and the Matrimonial Strategist, and an advisor for InterActive Legal.  He is the recipient of many awards including being a 2013 recipient of the prestigious Accredited Estate Planners (Distinguished) award from the National Association of Estate Planning Counsels.  Mr. Shenkman was named Financial Planning Magazine 2012 Pro-Bono Financial Planner of the Year for his efforts on behalf of those living with chronic illness and disability.  Investment Adviser Magazine featured him on the cover of its April 2013 issue naming as the lead of their “all-star lineup of tax experts.”

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