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What is a GRAT (grantor retained annuity trust)?

RetirementWarren Team

Quick answer

A grantor retained annuity trust (GRAT) is an irrevocable trust where you transfer assets, receive a fixed annuity back over 2–10 years, and your heirs receive any growth above the IRS Section 7520 hurdle rate, often gift-tax-free.

How a GRAT works with annuity payments and remainder.

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