GRANTOR RETAINED ANNUITY TRUST

The grantor retains the right to a set annual dollar amount (the annuity) for a fixed term and gives the principal to others, including relatives, at the end of that term. If the grantor survives until the end of the annu?ity term, all of the trust principal will be excluded from the grantor's estate for death tax purposes. Sometimes referred to as a "GRAT?.