GRAT Trusts

A Grantor Retained Annuity Trust (GRAT) is an irrevocable trust that pays the grantor a fixed annuity for the life of the trust. After that period, the remainder interest is payed to a noncharitable beneficiary, such as a niece, nephew, or child. This trust is funded partially or wholly by property of the grantor and then retains a fixed annuity for the life of the trust. These trusts are most commonly used with middle aged persons who want to transfer real estate to a family member.