Grantor Retained Annuity Trust (GRAT)
Grantor Retained Annuity Trust (GRAT)
An irrevocable trust in which you transfer assets and receive fixed annuity payments for a set term. Any growth above the IRS assumed interest rate passes to your beneficiaries with little or no gift tax, making GRATs effective for transferring rapidly appreciating assets. You must outlive the trust term for the strategy to succeed.