The House of Representatives' passage of the Small Business and Infrastructure Jobs Tax Act of 2010 may limit high-net-worth individuals' opportunities to slash their estate and gift tax bills.

Though the idea of restricting grantor retained annuity trusts, or Grats, had been discussed previously, estate planners did not give it much chance of enactment. But in both his fiscal 2010 and 2011 budgets, President Obama gave warning to affluent individuals, suggesting that Grats be limited. And though Obama did not propose repealing Grats altogether, the Small Business and Infrastructure Jobs Tax Act's enactment would significantly rein in the benefits of Grats and, in some cases, make them useless.

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