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
Premium required by an insurance company for plans subject to premium adjustment. The initial provisional premium is paid to put a commercial property or liability insurance policy into ...
Money set aside to pay for losses. Rather than buy insurance coverage for all potential losses, some businesses and individuals choose this form of self insurance to cover all or a portion ...
Based on historical loss experience, from which future loss experience is predicted. ...
One used to determine the life expectancy of annuitants. Annuity buyers are not representative of the population as a whole, or of life insurance buyers. Because annuities pay an income for ...
Coverage for a group of individuals under one policy. Usually, members belong to a particular company, union, or trade association. In a contributory plan a lump sum premium is paid by the ...
Circumstance in which there is a probability loss to personal property or real property resulting from property damage, destruction, or disappearance. ...
Proportion of losses incurred to premiums earned. This ratio indicates the amount of a premium dollar that is being consumed by losses. ...
Arbitrator who settles disputes over the amount of loss when an insurer and an insured do not agree. ...
Estate under the legal and administrative guidance of both the surety and the fiduciary. Any actions on the part of the estate requires the signatures of both in order to reduce the chances ...
Have a question or comment?
We're here to help.