Grantor Retained Annuity Trust (GRAT)

A Grantor Retained Annuity Trust (GRAT) is a legal template that outlines the creation and operation of a trust in which the grantor transfers assets and retains the right to receive fixed annuity payments for a specific term. This legal document sets out the terms and conditions under which this trust operates, including the calculation of annuity payments, the duration of the trust, and the eventual distribution of the remaining trust assets to the beneficiaries. The GRAT template may also include provisions for addressing potential tax implications and legal requirements associated with such trusts. It offers flexibility and tax advantages for grantors who wish to transfer assets to beneficiaries while minimizing their estate tax liability.