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Simple English definitions for legal terms

grantor-retained trust

Read a random definition: Natural resources - State statutes

A quick definition of grantor-retained trust:

A grantor-retained trust is a special type of trust that helps wealthy people reduce the amount of taxes they have to pay when they pass away. The person who creates the trust (called the grantor) gets some money from the trust for a certain number of years, and then the property in the trust goes to someone else without having to pay estate taxes. This type of trust is usually made with things that will grow in value a lot, so that the value of the trust goes up without having to pay taxes on it. There are three different kinds of grantor-retained trusts: annuity trusts, unitrusts, and income trusts.

A more thorough explanation:

A grantor-retained trust is a type of irrevocable trust that is created to reduce estate taxes. It is mostly used by wealthy individuals to limit estate and gift taxes. The grantor receives some form of income from the trust for a set amount of years, and then the property is transferred to a beneficiary free of estate taxes.

There are three main types of grantor-retained trusts:

  • Grantor-Retained Annuity Trusts (GRATs): With a GRAT, the grantor receives a fixed annuity payment from the trust for a set number of years. At the end of the term, the remaining assets in the trust are transferred to the beneficiary.
  • Grantor-Retained Unitrusts (GRUTs): With a GRUT, the grantor receives a percentage of the trust's value each year for a set number of years. At the end of the term, the remaining assets in the trust are transferred to the beneficiary.
  • Grantor-Retained Income Trusts (GRITs): With a GRIT, the grantor receives all of the income generated by the trust for a set number of years. At the end of the term, the remaining assets in the trust are transferred to the beneficiary.

For example, let's say a wealthy individual creates a GRAT and funds it with $1 million worth of stock. The grantor receives a fixed annuity payment of $50,000 per year for 10 years. At the end of the term, any remaining stock in the trust is transferred to the beneficiary free of estate taxes. If the stock has grown in value during the 10-year term, the beneficiary will receive the appreciated value tax-free.

In this way, grantor-retained trusts allow wealthy individuals to transfer assets to their beneficiaries while minimizing estate and gift taxes.

grantor-retained income trust | grantor-retained unitrust

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@madollyy: I focus on bringing your GPA up as much as possible in the last semester because once you graduate you cannot change that. So don't study for the LSAT next semester if you think that would impair your ability to get straight A's. As for LSAT studying, I would recommend LSAT Demon (ik controversial), the Loophole, and Reading Comp Hero.
*I would focus
JumpySubsequentDolphin
21:11
@texaslawhopefully: oh I’m not sure hahaha im just basing off of my friend who got a tutor bc she was rly struggling and it seemed like it helped her!
Yeah, that's fair! For some people it can help a lot. I'm just saying in general I don't think it is necessary unless you are trying to finetune a very specific area (or get to the high 170s because that is another thing in and of itself) OR are just terrible at the test. I tutor the test and I find that most people can improve just as much through self-study.
JumpySubsequentDolphin
21:13
that makes sense for sure
JumpySubsequentDolphin
21:13
i think for her it was a lack of discipline more than anything else tbh. she could not get herself to meaningfully study on her own
madollyy
22:05
I've finished all my major requirements, so I'm taking pretty much all electives next semester. Keeping one major specific class bc I'm majoring in it for a reason haha. But I'll be pretty free to study and try and improve my GPA. I will try self study first, see where that gets me. If that doesn't work I'll look into tutoring!
the way there probs won't be another wave until after thanksgiving LMFAO
i hate this
JumpySubsequentDolphin
22:07
omg i just got a Snapchat memory of my friend losing her mind bc she thought Eminem was black
JumpySubsequentDolphin
22:07
SHES FROM MICHIGAN
JumpySubsequentDolphin
22:07
THIRTY MINS AWAY FROM DETROIT
babycat
22:10
most of the stuff a tutor will teach you is stuff you can figure out yourself if you’re sufficiently motivated. if you would benefit from some support and structure tutoring can be helpful
babycat
22:13
thanks for the plug dk you’re a sweetie
^^one hundred percent agree
babycat
22:16
texas what made you decide you wanted to go to law school so young? just opportunity cost or something else?
GodsPlanUltimately
22:45
I ust submitted my application on LSAC but why does it say transmitted (still in the active application) and is not in the complete application file?
GodsPlanUltimately
22:45
Freaking out here
babycat
22:46
because you just submitted it. give it like an hour and it’ll go into the complete file
GodsPlanUltimately
22:47
Rationally that's what I thought but irrationally I was like crying throwing up did I mess it up lol
babycat
22:49
Lol you’re all good
GodsPlanUltimately
22:49
I'm assuming then for status checking eventually that the school emails you that information once LSAC finishes processing?
babycat
22:50
Yep
GodsPlanUltimately
22:50
Thank you ╱|、 (˚ˎ 。7 |、˜〵 じしˍ,)ノ
GodsPlanUltimately
22:50
Just stressing because this is my first and only app.
GodsPlanUltimately
22:53
Does the CAS Report send once the school requests it or do I have to send it ?
babycat
23:02
It sends automatically
babycat
23:02
Why only one app?
GodsPlanUltimately
23:06
I'm in a dual degree program that my undergraduate has where if you meet a gpa and percentile you can have your senior year be your L1 ! Cuts off a year of time and money and the partner was my top pick for law anyways. It all just worked out and since it's ED can't really apply anywhere else because the L1 transfers back to complete my degree. :)
babycat
23:14
oh that’s nice! I guess you have a high degree of certainty about the process then
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