Grantor‑Retained Income Trust

A Grantor‑Retained Income Trust (GRIT) is an irrevocable trust where:

• You transfer assets into the trust (a completed gift of the remainder interest).
• You retain the right to all net income from those assets for a fixed term.
• When the term ends, your income right stops immediately, and the principal passes to the remainder beneficiaries.
• If you survive the term, the assets (and all appreciation) are excluded from your estate.
• If you die during the term, the assets are pulled back into your estate under IRC §2036.

Who Can Be a Beneficiary (Important Limitation)

GRITs have strict rules on who can receive the remainder:
You cannot name:

• Your spouse
• Your parents or spouse’s parents
• Your children or spouse’s children
• Your siblings or their spouses

You can name:

• Nieces/nephews
• More distant relatives
• Unrelated individuals
• Certain trusts for those individuals

This makes GRITs far less flexible than GRATs or IDGTs.