Accredited Farm Manager (AFM) Exam

A Grantor Retained Annuity Trust (GRAT) is used in farm succession planning primarily to:

Provide operating credit to the farming heir Transfer appreciating farm assets to heirs at a reduced gift tax cost by retaining an annuity stream Protect farmland from creditor claims during bankruptcy Generate depreciation deductions for the farming operation

Correct Answer:

Transfer appreciating farm assets to heirs at a reduced gift tax cost by retaining an annuity stream

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