A grantor retained annuity trust, usually called a GRAT, is reviewed when a grantor wants to transfer assets while keeping the right to receive a fixed annuity for a stated term. It is an advanced retained-interest trust because the valuation assumptions, annuity design, and term length all matter to the planning result.
Last reviewed: March 9, 2026
Reviewed against: trust and estate planning references listed on the sources page.
Publisher: Larry Trustee AI Editorial Team | hello@larrytrustee.ai
The grantor transfers assets into the trust and retains the right to receive a fixed annuity amount during the term. If the grantor survives the term and the trust assets outperform the retained annuity assumptions, the remainder may pass to beneficiaries under the trust design.
A grantor retained annuity trust, or GRAT, is a retained-interest trust reviewed when the grantor keeps a fixed annuity stream for a set term.
People review GRATs to analyze transfer planning, retained annuity value, and whether asset growth beyond the annuity assumptions may pass under the intended structure.
A GRAT uses a fixed annuity amount, while a GRUT is reviewed around a unitrust amount that changes with asset value.