Intentionally Defective Grantor Trust (IDGT)

Remove millions from taxable estate—while you control assets and pay taxes yourself.

How It Works

1. Create irrevocable trust
2. Transfer assets
3. You pay income tax (the defect)
4. Assets removed from estate

Key Benefits

• Remove assets from taxable estate
• Zero gift tax (using exemption)
• Tax-free growth
• Maintain control

Common Uses

• Business owners (transfer interests)
• Real estate investors
• Investment portfolios
• Life insurance (ILIT)

IDGT vs. ILIT

Both remove assets from estate—but IDGT is general wealth transfer, ILIT specifically for life insurance.

Conclusion

IDGTs are powerful wealth transfer tools—remove assets, achieve tax-free growth, transfer to heirs tax-free.

Disclaimer: Consult professionals.