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
Organization following the format of Lloyd's of London. ...
worth of each accumulation unit at the end of each valuation period for a variable annuity. This value is similar to that of the net asset value for a mutual fund. ...
Figure used in calculating a worker's primary insurance amount (PIA) to determine Social Security benefits in the following manner: calculate the number of years between the worker's ...
Report developed by or supplied by a credit agency to an insurer dealing with the financial standing and character of an insurance applicant. These factors are carefully weighted by the ...
Investment risk associated with the possibility that there is a rise in the interest rates after a fixed income security has been purchased resulting in a decline in that security's price. ...
Maximum limit of liability of an insurance company for a particular claim or kind of loss that is applicable in general to all such claims or losses. This maximum limit of liability is ...
clause found in health insurance contracts that requires the insured to pay a specified percentage of the covered health care expenses. ...
Minimum amount of coverage for which a company will write a liability insurance policy. ...
Same as term Floater: coverage for property which moves from location to location either on a scheduled or unscheduled basis. If the floater covers scheduled property, coverage is listed ...
Have a question or comment?
We're here to help.