A Grantor Retained Annuity Trust (GRAT) is an estate planning vehicle that allows a person (the grantor) to transfer assets to a trust while retaining the right to receive annuity payments for a specified period. After the trust term ends, the remaining assets in the trust pass to the beneficiaries, typically children or other family members, usually without incurring gift or estate taxes on the appreciation of those assets, if structured correctly.
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