As we move through 2025, Georgia residents face unique opportunities and challenges when it comes to estate planning. With the Federal Reserve's monetary policy decisions continuing to impact interest rates, it's crucial to understand how different estate planning strategies perform in various rate environments. At our Atlanta practice, we help clients navigate these choices while considering Georgia's specific laws and tax considerations.

Understanding the Current Rate Environment

The IRS publishes several key rates monthly that affect estate planning strategies: short-term, mid-term, and long-term Applicable Federal Rates (AFRs) and the §7520 rate. These rates determine the minimum interest required for family loans and influence the effectiveness of various wealth transfer techniques.

Georgia-Specific Considerations

Before diving into specific strategies, it's important to note that Georgia has no state estate tax, which gives our clients more flexibility in planning compared to residents of states with state-level estate taxes. However, Georgia does have specific rules regarding trusts and property transfers that must be considered when implementing any estate planning strategy.

Effective Strategies in Today's Environment

1. Grantor Retained Annuity Trusts (GRATs)

GRATs are particularly powerful for Georgia residents holding appreciating assets like commercial real estate or shares in growing Georgia-based businesses. Here's how they work: You transfer assets into an irrevocable trust while retaining the right to receive annual payments (an annuity) for a set term, typically 2-10 years. When the term ends, any remaining assets pass to your beneficiaries gift-tax free.

For example, consider a business owner in Atlanta who places $2 million worth of her growing technology company's shares into a 5-year GRAT. The trust pays her back an annuity calculated using the IRS §7520 rate. If the business value grows by 8% annually while the §7520 rate is 4%, the excess appreciation passes to her children free of gift tax. This can be especially valuable for Georgia's thriving technology corridor companies where significant appreciation is expected.

A key advantage of GRATs under Georgia law is that they can be structured as "zeroed-out" GRATs, meaning there's no gift tax consequence upon creation. If the assets underperform, the only cost is the setup fees and lost opportunity - there's no downside tax risk.

2. Qualified Personal Residence Trusts (QPRTs)

QPRTs offer unique benefits for Georgia homeowners, particularly those with valuable properties in appreciating areas like Johns Creek, Druid Hills, or coastal communities like Sea Island. This strategy allows you to transfer your home to beneficiaries at a reduced gift tax value while retaining the right to live there rent-free for a set period.

Consider this example: A couple owns a historic home in Ansley Park valued at $3 million. By transferring it to a QPRT with a 15-year term, they can significantly reduce the gift tax value - perhaps to $1 million or less - while continuing to live there. During the trust term, they maintain the same property tax benefits available to Georgia homeowners, including any homestead exemptions.

The gift tax savings increase with higher interest rates, making this an attractive strategy in today's environment. However, it's crucial to understand Georgia's specific property tax implications and to coordinate with any existing Georgia homestead protections.

3. Intra-Family Loans

With Atlanta's real estate market remaining strong and mortgage rates high, intra-family loans have become increasingly popular. These loans must charge at least the IRS minimum interest rate (the applicable federal rate, or AFR) but can still offer significant advantages over commercial loans.

Here's a practical application: Parents loan their child $800,000 to purchase a home in Virginia-Highland at the mid-term AFR of 3.5%. The child can deduct the mortgage interest under Georgia tax law, while the parents receive interest income at a rate that may exceed what they'd earn in many conservative investments. The parents can also forgive up to $34,000 of the loan annually ($17,000 per parent) using their gift tax exclusions.

These loans can be especially powerful when used to fund investments. If the borrowed funds are invested in a successful Atlanta startup or real estate project earning 10%, the spread between the investment return and the AFR accrues to the younger generation tax-free.

4. Charitable Strategies

Georgia offers unique opportunities for charitable planning through organizations like the Community Foundation for Greater Atlanta. Two powerful strategies are charitable lead trusts (CLTs) and charitable remainder trusts (CRTs).

Charitable Lead Trusts: These work particularly well for supporting Georgia's many charitable organizations while transferring wealth to the next generation. For instance, a CLT could be funded with $5 million of appreciated stock, paying 5% annually to a donor's fund at the Community Foundation for Greater Atlanta for 20 years, with the remainder passing to children. The charitable payments reduce the taxable gift value of the transfer to the children, and all appreciation passes to them tax-free.

Charitable Remainder Trusts: These can be especially valuable for Georgia residents with highly appreciated assets, such as founders' stock in successful companies or long-held real estate in rapidly developing areas. The trust provides income to you for life, with the remainder going to charity. You receive an immediate income tax deduction and avoid capital gains tax on the sale of appreciated assets within the trust.

For example, an owner of appreciated commercial property in Midtown Atlanta worth $4 million with a basis of $1 million could transfer it to a CRT, receive lifetime income, and benefit multiple Georgia charities upon their passing, all while claiming a significant current income tax deduction and deferring capital gains tax.

Implementation Considerations

For any of these strategies, careful attention must be paid to Georgia's specific legal requirements, including:

- Property law considerations for real estate transfers

- State-specific trust requirements and administration rules

- Coordination with Georgia's lack of state estate tax

- Impact on property tax benefits and homestead exemptions

- Asset protection implications under Georgia law

The success of these strategies often depends on careful drafting, proper valuation of assets (particularly for closely-held businesses and real estate), and coordination with your overall estate plan. Working with experienced Georgia counsel who understands both the technical requirements and practical implications is essential.

These strategies can be combined or used sequentially for maximum benefit. Regular review is important as tax laws, interest rates, and family circumstances change. Each should be tailored to your specific situation while considering both current conditions and long-term objectives.

Looking Ahead


Estate planning is not a one-time event but rather an ongoing process that should be reviewed regularly as circumstances change. This is particularly true given Georgia's growing population and evolving property values, especially in the metropolitan Atlanta area.

For Georgia residents considering implementing any of these strategies, it's essential to work with experienced counsel who understands both federal estate tax laws and Georgia-specific considerations. Your estate plan should be tailored to your unique situation while taking advantage of current market conditions and available planning opportunities.

We recommend scheduling a consultation to discuss which strategies might be most appropriate for your specific situation. Updates in tax laws, interest rates, and personal circumstances can all impact the effectiveness of different planning techniques.

Note: The information provided in this blog post is for educational purposes only and should not be considered legal advice. Please consult with a qualified attorney to discuss your specific situation.