To implement some of these techniques, a measuring interest rate must be used.  The rate for May 2008 is 3.2%.  Since January 1989 this rate has been lower only during the month of July 2003. 

For example, the Grantor Retained Annuity Trust is a planning technique for which the current low interest environment coupled with depressed asset values creates a unique estate tax planning opportunity. 

A Grantor Retained Annuity Trust (GRAT) is a trust created for a given term, during which the trust makes annuity payments to the creator of the trust.  At the end of the term, the remainder interest is distributed to the beneficiaries named in the trust.  The value of this remainder interest is a taxable gift.  The value of the remainder interest is determined with reference to the interest rate, discussed above, currently 3.2%. 

This value also takes in account the value of assets put into the trust.  Funding a GRAT with depressed real estate or securities, for which it is anticipated that there be a recovery within the trust term can produce very favorable results.

Based on the current interest rate, as long as the growth of the trust's assets exceeds 3.2% annually this excess will be transferred to the grantor's beneficiaries without the imposition of any additional gift tax.  The GRAT can also be combined with other estate tax planning concepts which would have the affect of reducing the required appreciation threshold from 3.2% to an amount less than 3% per year.

Since the Fed has indicated that it has reached the end of its interest rate cutting program and since the stock market shows signs of recovery, you may not have a wide window of time within which to take advantage of this perfect storm.