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rabbi trust

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Financial Dictionary

Rabbi Trust

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

Investopedia Commentary

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 irrevocable.

These trusts are sometimes referred to as Grantor Trusts.

See also: Beneficiary, Grantor, Irrevocable Trust, Trust

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