Grantor Retained Income Trust


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Related to Grantor Retained Income Trust: IDGT

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 ?
Some techniques that still work after the implementation of Chapter 14 include private annuities (which never had broad appeal but do have beneficial uses in certain situations J), grantor retained income trusts for personal residences, tangible property trusts and grantor retained annuity and unitrusts.
2036 alone covers the inclusion and valuation of two types of grantor trusts in a decedent's gross estate: charitable remainder trusts and grantor retained income trusts. Prior to this amendment the IRS had argued that at least some of these trusts might also be covered by Sec.
TECHNIQUES EMPLOYED TO TRANSFER FUTURE APPRECIATION Pages * Installment Sales 50-53, 446 * Private Annuities 50-53, 496 * Gifts 54-61 * Intentionally Defective Trusts 78-81 * Family Limited Partnerships 178-179, 483 * Recapitalizations 182-185 * Family Holding Companies 429 * Grantor Retained Income Trusts (GRITs) 437 * Grantor Retained Annuity Trusts (GRATs) 70-73, 437 * Grantor Retained Unitrusts (GRUTs) 437 * Remainder Interest Transactions (RITs) 516 (1) When an estate freezing technique culminates in the sale of a business interest, or other estate asset, the value represented by that interest is replaced in the estate by either the proceeds of the sale, or the obligation of the purchaser, both of which are estate assets subject to taxation.