grantor retained annuity trust
A term to know.
A trust that pays the creator or grantor a fixed amount for a fixed term. The annuity can be payable annually, semi-annually, quarterly or monthly, and may increase up to 20% from year to year during the term. The periodic payment does not increase or decrease by reason of the fair market value of the assets in the trust. At the end of the term, the assets remaining in the trust pass to designated beneficiaries.