Rabbi Trust

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DEFINITION of 'Rabbi Trust'

A trust created for the purpose of supporting the non-qualified benefit obligations of employers to their employees.

These trusts are sometimes referred to as "grantor trusts".

INVESTOPEDIA EXPLAINS 'Rabbi Trust'

Called a Rabbi trust due to the first initial ruling made by the IRS on behalf of a synagogue, these forms of trusts create security for employees because the assets within the trust are typically outside the control of the employers and are irrevocable.

RELATED TERMS
  1. Qualified Trust

    A tax-advantaged fiduciary relationship between an employer and ...
  2. Trust

    A fiduciary relationship in which one party, known as a trustor, ...
  3. Non-Qualified Deferred Compensation ...

    Compensation that has been earned by an employee, but not yet ...
  4. Irrevocable Trust

    A trust that can't be modified or terminated without the permission ...
  5. Beneficiary

    Anybody who gains an advantage and/or profits from something. ...
  6. Trustor

    An individual or organization that gifts funds or assets to others ...
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