Define: Grantor Retained Trust

A Grantor Retained Trust is a type of irrevocable trust in which the grantor retains certain rights or interests in the trust property for a specified period of time.

The grantor can retain the right to receive income from the trust property, the right to use the property, or the right to receive annuity payments for a specified period of time.

One benefit of a GRT is that it allows the grantor to transfer assets to beneficiaries while retaining some control or benefit from the assets during their lifetime. It can also be used as an estate planning tool to reduce estate taxes.

Yes, the grantor can serve as the trustee of a GRT, but there are specific rules and limitations that must be followed to ensure the trust is valid.

Once a GRT is established, the terms are generally irrevocable, meaning they cannot be modified or revoked by the grantor.

When the term of the GRT ends, the remaining trust property is distributed to the designated beneficiaries according to the terms of the trust.

Yes, there are tax implications for both the grantor and the beneficiaries of a GRT, so it’s important to consult with a tax professional or attorney when establishing a GRT.

A GRT can be used as part of a Medicaid planning strategy, but it’s important to ensure that the trust is structured in a way that complies with Medicaid rules and regulations.

In some cases, a GRT can provide asset protection from creditors, but it’s important to consult with a legal professional to ensure the trust is structured in a way that provides the desired level of protection.

The main difference is that in a GRT, the grantor retains certain rights or interests in the trust property for a specified period of time, whereas in a traditional irrevocable trust, the grantor gives up all rights and control over the trust property immediately.