Grantor-retained Income Trust (grit)
Irrevocable trust into which the grantor places assets and retains the income from or the use of these assets for a stipulated period of time. At the termination of this time period, the principal (assets) of the trust is transferred to the grantor's non charitable beneficiary. The non charitable beneficiary may include individual (s) such as a grandchild, niece, nephew, son, or daughter. Should the grantor survive the stipulated period of time, he or she will incur substantial savings in estate and gift taxes. In order for these savings in taxes to occur, the following requirements must be met by the grantor:
- income to the grantor must be the sole result of the income generated by assets held in the trust.
- any income generated by the assets held in the trust can be paid only to the grantor of the trust.
- neither the grantor nor the spouse of the grantor can act as a trustee of the trust.
- any income retained by the grantor must be for a period of time not to exceed 10 years.
Popular Insurance Terms
Coverage in which individuals who cannot obtain conventional automobile liability insurance, usually because of adverse driving records, are placed in a residual insurance market. Insurance ...
Cost of replacing damaged or destroyed property with comparable new property, minus depreciation and obsolescence. For example, a 10-year-old living room sofa will not be replaced at ...
Same as term Medical Examination: physical checkup required of applicants for life and/or health insurance to ascertain if they meet a company's underwriting standards or should be ...
Coverage in which one premium payment is made and the policy is fully paid up with no further premiums required. ...
Circumstance under which there is a significant deviation of the actual aggregate losses from the expected aggregate losses. For example, a hurricane is a hazard that is catastrophic in ...
Agreement by an insurance company to underwrite business submitted by an agent or broker even though that business is substandard. The object is to continue to attract profitable business ...
Requirement that the combination of medicare and the employer's plan can not be greater than the amount the employer's plan would pay without Medicare. ...
Provision of health maintenance organization (HMO) coverage. A member who is critically injured within the geographical service area of the HMO can use the nearest hospital for emergency ...
Process in life insurance by which an applicant who is uninsurable, or is a greater than average risk, seeks to obtain a policy from a company at a standard premium rate. Life insurance ...
Have a question or comment?
We're here to help.