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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.
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 ...
A common such vehicle is called the grantor retained annuity trust (GRAT). Federal tax law specifically allows for this vehicle. Here the grantor places an asset in the trust – one he expects will grow rapidly during the term of the trust.
Follow @SelenaMaranjian Hearing about tax shelters used by the rich can get many of us steamed. One technique recently in the news is the "Walton grantor retained annuity trust," or GRAT, which ...
Grantor-retained annuity trusts. Life insurance trusts. Special needs trusts. ... When it comes to non-grantor trusts, who pays taxes will depend on how the trust was set up. Trust accounting ...
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 ...
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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.