A Grantor Retained Income Trust

Posted on November 24, 2010


A Grantor Retained Income Trust is created to save estate taxes in the event that the Grantor outlives the termination date. In other words, if you leave money to someone in a trust, you can get income yourself from this money until your own death, or for a certain number of years. A grantor retained annuity trust is authorizex by the IRS Code section 2702(a)(2) (B). For federal tax purposes, this trust is treated as a grantor trust.
The Grantor Retained Income trust reduces gift taxes on the transfer of monies to children or other relatives of the grantor. It is best used with highly appreciating stocks and bonds. The value of the trust is determined when it is funded, so appreciations are tax free.

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Other sources of valuable information are the AARP website, the Federal Trade Commission website and the HUD website.  See Axsmith Law web site to speak to an attorney.