Grantor Retained Income Trust

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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 ?
Instead, grantor retained annuity trusts (GRATs) and grantor retained unitrusts (GRUTs) can be used to leverage gifts.
1, 2011, D transfers assets valued at $2 million to a graduated grantor retained annuity trust (GRAT).
It is explained to him about the possible use of a grantor retained annuity trust (GRAT) for a term of years.
In the case of a grantor retained annuity trust or "GRAT," an individual establishes an irrevocable trust and transfers property to the trust in return for a right to receive income for a certain period of time or the grantor's life, whichever is shorter.
The Grantor Retained Annuity Trust (GRAT) is an estate planning technique that can be used to transfer future appreciation to family members, or others, free of gift and estate taxes provided the grantor survives the trust term.
If the property ceases to be used as a personal residence, the trust ceases to be a QPRT and the trustee must distribute the assets outright to the grantor or convert the QPRT to a grantor retained annuity trust (GRAT).
Also, if the trust instrument provides, the $500,000 could be retained in the trust and converted into a grantor retained annuity trust (GRAT).
A grantor retained annuity trust (GRAT) is a split-interest gift, wherein the donor retains an income interest and the remainder passes to the next generation or a trust for their benefit.
A grantor retained annuity trust (GRAT) provides the donor with a fixed annuity payment.
8) The installment sale to a defective grantor trust resembles a grantor retained annuity trust (GRAT).
For example, a transfer to a grantor retained annuity trust (GRAT) or a qualified personal residence trust (QPRT) may produce a taxable gift the grantor must report.
Narang 2004 Grantor Retained Annuity Trust (GRAT) under Trust Agreement dated December 29, 2004 and the Chander K.