Skip Navigation Download Adobe Acrobat Reader 5.0 or higher to view PDFs.
Man looking out a brightly lit window

Financial Learning Center


Trusts

Grantor Retained Annuity Trust
A grantor retained annuity trust (GRAT) is an arrangement by which income-producing (or appreciating) property is transferred to a trust in exchange for the right to receive a fixed annuity amount for a specified term of years or for the life of the grantor.

Because you retain an income interest in the trust, the value of the interest transferred to beneficiaries is reduced – which may result in significant tax savings. Another benefit is that all future appreciation is transferred to beneficiaries without being subject to gift or estate tax. Any gift tax paid as a result of the transfer is removed from your estate, provided the GRAT is made more than three years before death.

Upon expiration of the term, the assets pass to beneficiaries free of estate tax on any appreciation. The payment of the remainder to the beneficiaries is not subject to gift or estate tax, because the tax was imposed when the trust was created.

Share Article:
Add to GooglePlus

Investment and insurance products and services are offered through INFINEX INVESTMENTS, INC. Member FINRA (Opens in a new Window)/SIPC (Opens in a new Window).  UniVest Financial Services is a trade name of UniBank. Infinex and UniBank are not affiliated. Products and services made available through Infinex are not insured by the FDIC or any other agency of the United States and are not deposits or obligations of, nor guaranteed or insured by, any bank or bank affiliate. These products are subject to investment risk, including the possible loss of value.


BrokerCheck