Grantor Retained Income Trust

(redirected from Grantor-Retained Annuity Trust)

Grantor Retained Income Trust (GRIT)

A tax-saving trust in which a grantor transfers property to a beneficiary, but receives income until termination, at which time the beneficiary begins receiving the income.

Grantor Retained Income Trust

A trust in which the grantor places some assets for the beneficiary, but retains the right to receive income from those assets up to a certain point, at which time the beneficiary begins to receive the income. This allows the beneficiary to receive income from the trust without being subject to the estate tax. A disadvantage is the possibility that the grantor will die before the expiration of the trust, which results in the assets transferring to the grantor's estate. In that case, the beneficiary does not receive anything. It is also called a grantor retained annuity trust.
References in periodicals archive ?
A strategy that works very well with single stock is called a rolling short-term grantor-retained annuity trust (GRAT).
The grantor-retained annuity trust (GRAT) is the Dirty Harry of estate and gift planning.
Three such tools are the private annuity, grantor-retained annuity trust (GRAT), and the preferred stock recapitalization.
In 1990, Congress added chapter 14 to the IRC, which created three statutory irrevocable trusts: the grantor-retained annuity trust (GRAT), the grantor-retained unitrust (GRUT) and the QPRT.
The grantor-retained annuity trust (GRAT) is a wealth transfer vehicle that receives its initial funding from the grantor and transfers annuity payments to the grantor's personal portfolio each year.
For example, one breakout session will address the use of a grantor-retained annuity trust -- which assets are ideal for funding, how cash flows work, and how to maximize the value of this technique for your clients.
One situation in which this may inadvertently result is when a parent contributes stock of a company he wants to pass on to his children to a grantor-retained annuity trust (GRAT).
If a grantor-retained annuity trust is used, and there is a spousal interest in the event the grantor dies during the trust term, this will presumably have to meet the QDT rules to accomplish the desired result.
Rowe also established a grantor-retained annuity trust ("GRAT") in September 2003 and transferred Aetna stock options into that trust.
Rowe also has established a grantor-retained annuity trust and has transferred certain Aetna securities into the trust to enable his children to benefit from any future appreciation in the Aetna stock price.
The new Sanders-Harkin-Whitehouse bill also would close several estate tax "loopholes" - as advocated in President Obama's FY 2011 budget proposal, by requiring consistent valuation for transfer and income tax purposes, requiring a 10-year minimum term for grantor-retained annuity trusts, and modifying the rules for valuation discounts.
Nesbet-Sikuta is an experienced practitioner in trusts and estates and works closely with clients to develop and execute the right strategies for clients' long- and short-term estate plans with revocable trusts, grantor-retained annuity trusts and irrevocable life insurance trusts, among other forms of estate planning.
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