grantor retained annuity trust (GRAT)

Definition

A financial tool where the grantor transfers interest in a real property to an individual acting as a trustee for a specified period of time. The grantor in turn receives an annuity amount based on the assets value during the time the trust was created. The trust is often used to enable individuals to make large financial gifts to members of their family without having to incur the gift tax imposed by the IRS.

Use this term in a sentence

You may want to try and take on a grantor retained annuity trust that will allow you to have more flexibility.

​ Was this Helpful? YES  NO 10 people found this helpful.

The grantor retained annuity trust was something really important to me and I felt like things would not work with it.

​ Was this Helpful? YES  NO 11 people found this helpful.

When Mike's bank was acting as the grantor in a grantor retained annuity trust, he knew that the trustee was very reliable and felt secure in the investment.

​ Was this Helpful? YES  NO 3 people found this helpful.

Show more usage examples...

Browse Definitions by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
grantor grantor retained income trust (GRIT)