Grantor Retained Annuity Trust (GRAT)
A Grantor Retained Annuity Trust (GRAT) is a sophisticated estate tax planning vehicle that allows you to transfer future appreciation of assets to your heirs with little or no gift tax. You transfer appreciating assets (stocks, business interests, real estate) into an irrevocable trust and receive a fixed annuity payment back for a specified term of years. If the assets appreciate faster than the IRS hurdle rate (the Section 7520 rate), the excess growth passes to your remainder beneficiaries gift-tax-free at the end of the term. The key risk is mortality — you must survive the annuity term or the assets revert to your estate. A "zeroed-out" GRAT is structured so the present value of your annuity equals the value of assets transferred, resulting in a zero gift tax value. GRATs are ideal for wealthy individuals with appreciating assets who want to transfer wealth efficiently.
Key Features
- Minimal gift tax on transfers
- Transfers asset appreciation to heirs
- Zeroed-out structure available
- IRC § 2702 compliant
- Grantor pays trust income tax
- Dual Co-Trustee structure
- Mandatory spendthrift provision — real protection against lawsuits, divorce, and creditors
- No-contest (in terrorem) clause — any challenge results in disinheritance
- Discretionary distributions — non-attachable, unpredictable payouts
- Trustee removal & replacement without court order
Questionnaire
You'll answer 11 guided questions to customize your trust document. The questionnaire takes approximately 10–15 minutes.
Who Should Use a Grantor Trust?
Wealthy individuals who want to transfer appreciating assets to heirs at minimal gift tax cost while retaining certain tax attributes and control during the trust term.
Ideal For:
What's Included in Your Document Package
Every trust document purchase comes with a complete legal document package:
Complete Trust Agreement
A fully drafted trust document with all required articles, recitals, and legal provisions specific to your trust type.
Certificate of Trust
A standalone Certification of Trust that certifies the trust exists and summarizes key terms — accepted by banks, courts, and third parties without disclosing the full agreement.
Co-Trustee Resolution Template
A ready-to-use Co-Trustee Resolution template for joint decisions, administrative actions, and record-keeping.
Multi-Jurisdictional Execution
Signing and notarization instructions for U.S. (Notary Public), Canadian (Commissioner of Oaths), and international (Apostille) jurisdictions.
Asset Protection Provisions
Built-in spendthrift clauses, creditor protections, and beneficiary safeguards tailored to your trust type.
Schedule of Trust Assets
An organized Exhibit A for listing all property, financial accounts, real estate, and digital assets transferred to the trust.
How It Works
From selection to signed document in four simple steps:
Complete the Questionnaire
Answer a guided set of questions about your trust parties, beneficiaries, assets, and preferences. No legal knowledge required — we guide you through every step.
Secure Payment
Pay securely via Stripe. Your payment is processed with bank-level encryption. You can review your order before paying.
AI Generates Your Document
Our legal AI engine drafts your trust document and Certificate of Trust using the specific statutes and provisions for your trust type — typically in under 2 minutes.
Download & Print
Instantly access your completed trust document. Download, print, and execute with a notary or commissioner of oaths. Re-download anytime from your account.
How to Complete This Trust
Answer each question carefully and completely. Your answers are used to generate your custom legal document. Keep the following in mind:
- Use full legal names exactly as they appear on government-issued ID.
- For addresses, include street, city, state, and zip code.
- For beneficiaries, specify the percentage each receives (all percentages must total 100%).
- For asset descriptions, be specific — include property addresses, account numbers, or vehicle VINs where applicable.
- Required fields (marked with *) must be completed before proceeding.
- You may return and edit answers before final payment.
To ensure your trust is legally valid and enforceable, the parties must be properly separated. A court may invalidate a trust — or disregard its asset protection — if one person holds roles that create an inherent conflict of interest.
Roles that MUST be separated:
- Sole Trustee & Sole Beneficiary: The same person cannot be the only Trustee AND the only Beneficiary. This merges legal and equitable title, collapsing the trust.
- Grantor as Sole Trustee (Irrevocable Trusts): In irrevocable and asset protection trusts, the Grantor should generally NOT serve as sole Trustee — this defeats asset protection and may trigger estate inclusion.
- Trustee & Beneficiary (Same Person, Sole Roles): A Trustee who is also the sole Beneficiary with absolute discretion may cause the trust to be treated as the Trustee's own property by a court.
- Grantor & Sole Beneficiary (Irrevocable): If the Grantor is also the sole Beneficiary of an irrevocable trust, creditors can typically reach the trust assets.
- Trust Protector & Trustee: The Trust Protector should be independent from the Trustee to serve as a genuine check on Trustee power.
- Witness & Beneficiary: Witnesses to the trust signing should not be beneficiaries, as this may create a conflict and is disallowed in some jurisdictions.
Recommended Role Assignments:
- Grantor/Settlor: Creates and funds the trust. Should be a different person from at least one Trustee in irrevocable structures.
- Co-Trustee 1: Manages trust affairs jointly. Should be independent from the Grantor where possible.
- Co-Trustee 2: Provides checks and balances. Must be a different person from Co-Trustee 1.
- Successor Trustee(s): Steps in if a Trustee cannot serve. Should not be the same person as the primary Trustee.
- Beneficiaries: Receive distributions. Can include the Grantor in revocable trusts, but not as sole Beneficiary in irrevocable trusts.
- Trust Protector (optional): Independent oversight. Must not be the Trustee, Grantor, or a Beneficiary.
Why this matters: If a court finds that the same person effectively controls the trust AND benefits from it exclusively, the trust may be treated as a "sham" or "alter ego," rendering it invalid. This can expose trust assets to creditors, probate, and taxation. When in doubt, consult a licensed attorney in your jurisdiction.
In-Depth Guide
A Grantor Trust is any trust where the Grantor retains certain powers or interests that cause the trust's income to be taxed to the Grantor personally. The most common example is the Revocable Living Trust, but many irrevocable trusts can also be structured as grantor trusts for tax benefits. GRATs (Grantor Retained Annuity Trusts) and IDGTs (Intentionally Defective Grantor Trusts) are popular advanced planning tools.
Legal Disclaimer
Not Legal Advice. TrustApp is an online document generation platform and is not a law firm, attorney, or legal service provider. The documents generated through this platform are based on the information you provide and are intended for general informational and educational purposes only. They do not constitute legal, tax, or financial advice.
No Attorney-Client Relationship. Use of TrustApp does not create an attorney-client relationship between you and TrustApp, its owners, operators, or any affiliated party. No one associated with TrustApp is acting as your attorney.
Jurisdictional Variations. Trust laws differ significantly across U.S. states, Canadian provinces, and international jurisdictions. A document that is valid in one jurisdiction may not be recognized or may be treated differently in another. It is your responsibility to ensure the document complies with the laws of your specific jurisdiction.
Professional Consultation Required. Before signing, executing, or filing any trust document, you are strongly advised to consult with a licensed attorney, qualified tax advisor, and/or financial professional in your jurisdiction. They can review your document, advise on its suitability for your specific circumstances, and ensure proper execution and funding.
No Warranty. TrustApp makes no representation or warranty regarding the legal validity, enforceability, or adequacy of any document generated through the platform. Documents are provided "as is" without warranty of any kind. TrustApp shall not be liable for any damages arising from the use of any generated document.
Party Roles & Conflicts of Interest. It is your responsibility to ensure that the parties named in your trust (Grantor, Trustee, Co-Trustee, Beneficiary, Successor Trustee, and Trust Protector) do not serve in roles that create a conflict of interest under the laws of your jurisdiction. Certain combinations of roles may render a trust invalid or unenforceable. Consult a licensed attorney if you are uncertain about role assignments.
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