Intentionally Defective Grantor Trust (IDGT)
Broken on Purpose
This may be one of the best conversation-starter trusts in the entire collection simply because of the name. It sounds absurd. Which makes it memorable.
An IDGT is an advanced estate planning trust intentionally designed to create certain tax consequences for income tax purposes while achieving different outcomes for estate tax purposes. In simple terms: the trust is "defective" by design.
- transfer appreciating assets
- reduce estate taxes
- leverage valuation strategies
- create advanced wealth transfer structures
“Defective means flawed.”
In this context, "defective" is actually intentional and strategic.
- High-net-worth families
- Business owners
- Advanced estate tax planners
- Families with appreciating businesses or investments
This trust perfectly illustrates how sophisticated planning often lives in nuance.
The Deep End
Grantor Retained Annuity Trust (GRAT)
Freezing the Value
VIII.2Irrevocable Life Insurance Trust (ILIT)
Keeping Insurance Outside the Estate
VIII.4Pet Trust
Planning for the Animals We Love
VIII.5Digital Asset Trust
The Estate You Cannot Touch
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We offer a private, 30-minute consultation—by phone or Zoom—for individuals and families considering estate planning, elder law, or trust administration services. This conversation allows us to understand your goals, answer your questions, and help determine whether our firm is the right fit for your needs.
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