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A GRIT, or Grantor Retained Income Trust, is a type of trust designed to save estate taxes in the event that the Grantor outlives the termination date of the trust itself.

Expanded Definition

Under such a trust, which must be irrevocable and have a life of at least 15 years, the grantor transfers property immediately to the beneficiary, but receives income until termination, at which time the beneficiary begins receiving it. At that point, the grantor pays a gift tax based on the original value of the gift. When the grantor dies, the gift is added back to the grantor's estate at the value as of the day of the gift, not its (presumably) higher current value.

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