A grantor letter is a written instruction from the creator of a grantor trust directing the trustee and counterparties (e.g., banks, insurers) how to treat the trust for income-tax and administrative purposes. It typically confirms grantor-trust status, provides tax-reporting details (e.g., the grantor's SSN), and may address powers such as substitution of assets, reimbursement of taxes, investment intent. The letter helps third parties align account opening, premium payments, and tax reporting with the trust's design, reducing operational friction and audit questions.

Trustees present grantor letters to banks and carriers to open accounts, set up premium drafts, and confirm tax reporting under the grantor's TIN. Clear instructions reduce W-9 mismatches and streamline administration for ILITs and grantor trusts funding insurance.