Grantor of Trust: Rights, Responsibilities, and Tax Implications Explained
Warren Team
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Key terms
- TrustA legal arrangement in which one party, called the trustee, holds and manages assets on behalf of another party, known as the beneficiary. Trusts can be used to control how and when your assets are distributed, potentially reduce estate taxes, and avoid the probate process. There are many types of trusts, each designed to address specific financial and estate planning goals.
- Tax BracketThe range of income subject to a certain income tax rate in the progressive US tax system. Higher income levels are taxed at higher rates (marginal tax rates).
- Marginal Tax RateThe tax rate applied to your last dollar of income. In the US progressive tax system, different portions of income are taxed at different rates.
- REIT (Real Estate Investment Trust)A company that owns, operates, or finances income-producing real estate. Allows investors to earn real estate income without buying property directly. Must pay 90% of income as dividends.
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