Search results
Results from the WOW.Com Content Network
A grantor-retained annuity trust (commonly referred to by the acronym GRAT) is a financial instrument commonly used in the United States to make large financial gifts to family members without paying a U.S. gift tax.
Trusts have certain requirements for creation. First, the grantor must show an intent to create a trust. [80] Concordantly, the grantor must have the mental capacity to form such an intent and to create the trust. [81] Also, if the grantor was "forced" to create the trust due to fraud, duress or undue influence, it is deemed void. [82]
Audrey J. Walton created two grantor retained annuity trusts (GRATs). [1] Each GRAT had a two-year duration during which Audrey retained the right to receive an annuity. [1] If Audrey died within the two-year period, the annuity payments would be received by her estate. [1] "The balance of the trust property would then be paid to the remainder ...
The person who creates the trust is known as the grantor. A trust is overseen by a trustee. ... Grantor-retained annuity trusts. ... Trusts and their beneficiaries will use IRS Form 1041 and a K-1 ...
Charitable remainder trusts and grantor-retained annuity trusts are common tools to minimize taxes while passing on assets efficiently. Capital gains planning: ...
It's one thing to understand the annuity asset class, but it's another thing to go down the rabbit hole of annuities, given the many shapes, variants, and other unique traits that can be tied to them.
Grantor retained annuity trust ('GRAT'): an irrevocable trust whereby a grantor transfers asset(s), as a gift, into a trust and receives an annual payment from the trust for a period of time specified in the trust instrument. At the end of the term, the financial property is transferred (tax-free) to the named beneficiaries.
Mitigation strategies can include making inter vivos (lifetime) transfers that are subject to lower effective tax rates than transfers at death, transferring property through insurance trusts or grantor-retained annuity trusts, making gifts to charity, transferring minority business interests, taking maximal advantage of each spouse's ...