Grantor Retained Annuity Trust (grat)
Definition of "Grantor retained annuity trust (grat)"
Irrevocable trust into which the grantor places assets and receives in turn a fixed amount of income from a fixed annuity (amount of income stipulated at the time the trust is established) for either a given number of years, or for the lesser of a given number of years, or until the grantor's death. When the term of the trust expires, assets in the trust to include any appreciation are distributed to the named remainder beneficiary (s). If the assets in the trust fail to generate sufficient income to make the required annuity payments, the principal of the asset on deposit in the trust must be liquidated in an amount needed to meet the required income payments. This principal could diminish dramatically by the time it is transferred to the remainder beneficiary (s). If the grantor is alive when the trust terminates, the assets and their appreciation within the trust are not included in the grantor's estate.
Popular Insurance Terms
Excess coverage for employers who use self insurance for routine workers compensation risks. Many employers consider workers compensation exposure to be routine and predictable and set up a ...
Same as term Expected Loss: probability of loss upon which a basic premium rate is calculated. ...
System whereby the re insurer shares losses in the same proportion as it shares premium and policy amounts. Proportional reinsurance may be divided into the two basic forms: automatic ...
interconnection of computers that contain pages classified into groups called web sites that can be accessed over the internet. The only requirement for visiting a web site is to have ...
Calculation of the premium based on such factors as the applicant's age, sex, health record, family history, and type of insurance plan applied for. ...
Program enacted in 1965 under Title XVIII of the Social Security Amendments of 1965 to provide medical benefits to those 65 and over. The program has two parts: Part A, Hospital Insurance, ...
Form that reports the status and activity of retirement plans to the Internal Revenue Service (IRS). The IRS uses this form to determine whether a retirement plan is in compliance with all ...
Amount of loss that insured pays in a claim; includes the following types: Absolute dollar amount. Amount the insured must pay before the company will pay, up to the limits of the policy. ...
Failure to act with the legally required degree of care for others, resulting in harm to them. ...
Have a question or comment?
We're here to help.