‘G’ Retirement Terms

Generation-Skipping Transfer Tax (GSTT): "A tax incurred when there is a transfer of property by gift or inheritance to a beneficiary who is more than 37.5 years younger than the donor. Generation-skipping transfer taxes serve the purpose of ensuring that taxes are paid when assets are placed in a trust, and the person receives amounts in excess of the generation-skipping estate tax credit."

Generation-Skipping Trust: "A type of legally binding trust agreement in which the contributed assets are passed down to the grantor's grandchildren, not the grantor's children. The generation to which the grantor's children belong skips the opportunity to receive the assets in order to avoid the estate taxes that would apply if the assets were transferred to them."

Gift: "Property, money or assets that one person transfers to another while receiving nothing or less than fair market value in return. Under certain circumstances, the IRS collects a tax on gifts. Transfers of money or property that are given freely or exchanged for less than market value may be subject to the gift tax if the donor has exceeded the annual or lifetime gift exemption."

Gift Causa Mortis: "A gift to be given at a later date in anticipation of the giver's death. If the giver dies of an ailment differing from the expected one, the gift is not effective. The gift may be revoked by the giver on any date prior to the expected date as long as no property, whether concrete or symbolic, has been delivered to the recipient."

Gift In Trust: "An indirect bequest of assets to a beneficiary by means of a special legal and fiduciary arrangement. The purpose of a gift in trust is to avoid taxes on gifts that exceed the annual gift tax exclusion amount. Gift taxes are almost always paid by the gift giver and if they exceed $13,000 in one year the excess is taxable."

Gift Inter Vivos: "A gift given during the life of the grantor. Following a gift inter vivos, the grantor no longer has any rights to the property, and cannot get it back without the permission of the party it was gifted to."

Gift Letter: "Written correspondence to a lender stating that money received from a friend or relative is a gift. Gift letters typically come into play when a borrower has received assistance in making a down payment on a new home or other real estate property. Such letters also explicitly state that the money received is not expected to be paid back in any way, shape or form."

Gift Splitting: "A taxation rule that allows a married couple to split a gift's total value as if each contributed half of the amount. Gift splitting allows a couple to increase their total gift tax exemption amount by combining individual allowances."

Gift Tax: "A federal tax applied to an individual giving anything of value to another person. For something to be considered a gift, the receiving party cannot pay the giver full value for the gift, but may pay an amount less than its full value. It is the giver of the gift who is required to pay the gift tax. The receiver of the gift may pay the gift tax, or a percentage of it, on the giver's behalf in the event that the giver has exceeded his/her annual personal gift tax deduction limit."

Gift Tax Return: "A federal tax form that must be filled out by any individual who gives a gift that exceeds the annual or lifetime exempt gift amount established by the IRS. For example, if the annual gift tax exemption is $13,000 per recipient, anyone who gives a gift worth $13,001 or more to a single recipient will have to fill out a gift tax return. The return must be filled out because gifts above the exempt amount are subject to a gift tax."

Gifted Stock: "Stocks given from one person or entity to another person or entity. Gifted stocks do not include equities that were either received from a spouse or those stocks received through an inheritance from a descendent. For tax purposes, the cost of the stock is the original donor's cost upon purchasing the securities and capital gains taxes will have to be paid based on the original purchase amount."

Gifting Phase: "The stage in an investor's life where he or she seeks to use his or her accumulated wealth to provide for the current and future needs of family and friends, as well as to leave a mark on the world by funding charities of his or her choice through philanthropy. The investor's concerns during this phase shift from matters of capital accumulation to estate planning and tax minimization."

Government Pension Fund (Norway): "A fund made up of two separate Norwegian investment funds with different mandates: the Government Pension Fund – Global and the Government Pension Fund – Norway. The Government Pension Fund – Global is a sovereign wealth fund derived mainly from Norway's oil wealth. The Government Pension Fund – Norway was previously associated with Norway's social security system, but is now a sovereign wealth fund that invests strictly in Norwegian firms."

Government-Sponsored Retirement Arrangement (GSRA): "A Canadian retirement plan for individuals who are not employees of a local, provincial or federal government body, but who are paid for their services from public funds. This type of retirement plan is not registered with the Canadian Revenue Agency and therefore does not qualify for tax-deferred status. "

Graded Vesting: "The process by which employees gain a certain percentage of irrevocable rights over employer contributions made to the employee's retirement plan account each year until the employee is fully vested. With graded vesting, an employee will become vested in at least 20% of their accrued benefits following an initial period of service, with an additional 20% in each following year until full vesting occurs. The initial period of service can vary depending on how the employer determines the amount of its contributions."

Graduated Vesting: "The accelerated benefits employees receive as they increase the duration of their service to an employer. A vesting schedule is mandated by federal law for the employers' contribution portion of private retirement plans. It specifies the minimum number of years a company may require employees to work in order to earn the vested right to all or part of the employer contributions."

Grant Deed: "A legal document used to transfer ownership of real property. A grant deed contains the name of the person or entity transferring the property (the grantor); the legal description of the property being transferred (i.e., lot number, tract number, city, county and state); and the name of the person or entity that the property is being transferred to (the grantee). The grant deed shows that the title has not already been granted to another person."

Grantor Retained Annuity Trust (GRAT): "An estate planning technique that minimizes the tax liability existing when intergenerational transfers of estate assets occur. Under these plans, an irrevocable trust is created for a certain term or period of time. The individual establishing the trust pays a tax when the trust is established. Assets are placed under the trust and then an annuity is paid out every year. When the trust expires the beneficiary receives the assets tax free."

Grantor Trust Rules: "Guidelines that state a trust is considered to be a grantor trust if the grantor has a reversionary interest greater than 5% of the trust assets (at the time the transfer of assets to the trust is made). If a trust is considered to be a grantor trust, then the income from the trust will be taxed to the grantor, and not to the trust."

Gross Estate: "The total dollar value of all property and assets in which an individual had an interest at the time of his or her death. The gross estate figure is the gross value of a person's estate before liabilities such as debt and taxes are deducted. When a person dies, the executor or executress of the estate performs an assessment of the assets belonging to the deceased including real property, stocks, bonds, other investments and personal property. The gross estate figure is commonly produced for federal income tax purposes, and is the figure from which liabilities will be deducted to determine the net estate value."

Group Carve-Out Plan: "A type of group term life insurance designed to appeal to well-paid executives by improving their employer-sponsored life insurance coverage. Under a group carve-out plan, the employee retains $50,000 of ordinary group term life insurance coverage, but the rest is provided by a universal life insurance policy. The group carve-out plan replaces the current group life insurance amount over $50,000 on the people the company wishes to carve out."

Group-Home Care: "Care given to a group of people with similar disabilities within a residence. Those in a group home receive both custodial care and care that is provided by skilled and medically trained professionals. A common disability of people in group homes is Alzheimer's disease."

Guarantee Company: "A form of corporation designed to protect members from liability, but which typically does not distribute profits to its members and does not divide assets into shares. Members of a guarantee company are obligated to pay a specific sum of money – a guarantee – if the company is wound up. This amount of money can vary by member, but is typically very small for private guarantee companies and larger for public guarantee companies."

Guaranteed Lifetime Withdrawal Benefit (GLWB): "A rider on a variable annuity that allows minimum withdrawals from the invested amount without having to annuitize the investment. The amount that can be withdrawn is based on a percentage of the total amount invested in the annuity."

Guaranteed Minimum Pension (GMP): "Pensions earned while working in the United Kingdom's public sector between 1978 and 1997. During those years, the UK's public sector pension plan was contracted out and the pensions earned are handled differently than other years. The amount of pension earned during these years is supposed to be roughly equivalent to the amount an employee would have otherwise earned."

Guaranteed Minimum Withdrawal Benefit (GMWB): "A type of option that annuitants can purchase for their retirement annuities. This specific option gives annuitants the ability to protect their retirement investments against downside market risk by allowing the annuitant the right to withdraw a maximum percentage of their entire investment each year until the initial investment amount has been recouped."

Guardian IRA: "An IRA held in the name of a legal guardian or parent on behalf of either a child under the age of 18-21 (depending on state legislation) or an individual who is incapable of handling finances due to physical or mental disability."

GUST Restatement: "As a result of changes to tax law in the United States, employers and retirement plan sponsors are required to complete new Adoption Agreements and restate their prototype qualified plans. In order for plans to maintain their qualified status, they must meet different statutory regulations."