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
Endorsement to a property insurance policy providing all risks coverage for insured property. Excluded properties include residences, farms, and manufacturing properties. This endorsement ...
Assistance program for the financially needy. Medicaid, also referred to as Title XIX of the Social Security Act, was enacted in 1965 at the same time as medicare. It is a joint ...
Fee charged to a policyowner when a life insurance policy or annuity is surrendered for its cash value. This fee reflects insurance company expenses incurred by placing the policy on its ...
In insurance, company revenues from underwriting and investment. Insurance companies make money first, by underwriting good risks so that their premium dollars cover claims losses and ...
Portion of the death benefit in a life insurance policy paid upon the insured being diagnosed as having a terminal illness that will result in death within a year. ...
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 ...
Legal status giving an insurance company all rights to an insured's property. The abandonment clause is usually found in marine insurance and not in other property insurance policies such ...
Physical, moral, or financial circumstance of a life insurance applicant that sets him or her apart from a physically, morally, and financially sound standard applicant. The underwriting ...
Legal procedure through which a court determines the rightful claimant (of two or more claimants making the same claim) against a third party. Insurance companies use interpleader if claims ...
Have a question or comment?
We're here to help.