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GRATs Let Children Pass Millions to Mom or Granny Tax-Free

Anita Sarafa, a managing director for JPMorgan Chase & Co. Private Bank, helped a client give more than $300,000 to his parents free of gift taxes, using an estate strategy the Obama administration is seeking to limit.

Grantor retained annuity trusts, or GRATs, allow wealthy children to pass investment gains to their parents or grandparents without dipping into their $5 million lifetime gift-tax exemptions.