A Practice Note discussing the grantor retained annuity trust (GRAT), with a focus on proper usage of GRATs in estate planning and key considerations in drafting GRATs. Topics addressed include statutory requirements for creating and administering a GRAT, the importance of the IRC Section 7520 hurdle rate to the success of a GRAT, how GRATs function in an estate plan, proper structuring of a GRAT, federal income and transfer tax considerations when using a GRAT, and advantages and disadvantages of using a GRAT.