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
Policy provision that provides coverage for continuing payroll expense of all employees of an insured business (except for officers and executives) for the first specified number of days of ...
Insurance coverage that protects the exporter (even though the exporter may be in total compliance with the terms and conditions of the contract) in the event a foreign government calls the ...
Group appointed by President Nixon in 1971 to study workers compensation laws under the authorization of the occupational safety and health act (OSHA). It issued sweeping recommendations to ...
Person who commits a tort, a type of wrongful act, that causes injury or damage. ...
Policy that comes into existence or adjusts the amount of coverage to provide protection for newly acquired or increasing values of an insured's real or personal property. ...
Act that requires the Department of Labor (DOL) to have a formal program to educate the public about the importance of saving for retirement. The DOL is also required to educate the public ...
An act or violation that consists of two wrongs: tort negligent act or omission by one or more parties against the person or property or another party or parties, liability insurance is ...
Contracts of reinsurance in which expected income from investments is a major component of the UNDERWRITING process. Also, the ultimate liability of the reinsurer is limited. The reinsurer ...
Insurance policy renewable at the option of the insured for a specified number of years or to a stated age. The insurance company cannot refuse to renew the policy and cannot change any of ...
Have a question or comment?
We're here to help.