A graduated rate estate (GRE) is an estate that arises as the result of the death of a person on or after December 31, 2015, and no more than 36 months after the person’s death. The estate at that time must be a testamentary trust. Beginning on December 31, 2015, a graduated rate estate of an individual at any time is the estate that arose on and as a consequence of the individual’s death, if that time is no more than 36 months after the death of the individual and the estate is at that time a testamentary trust. A graduated rate estate benefits from a special tax status and pays income taxes on its income at a graduated rate. Normally, the entire income of a trust is taxed at the top marginal tax rate; however, a graduated rate estate is taxed like an individual in that it pays income tax on its income based on graduated income tax brackets, resulting in a lower average tax rate than regular trusts.