• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • Home
  • Who We Are
    • About Our Firm
    • Career Opportunities
    • Meet Our Team
    • News and Events
    • Seniors Rock Radio
  • Estate Planning
    • Elder Law & Medicaid Planning
    • Estate Planning Services
    • Estate and Gift Tax Figures
    • Family Farm Succession Planning
    • Family-Owned Businesses & Farms
    • IRA Planning
      • Planning With An IRA
      • IRA & Retirement Planning
    • Legacy Planning Services
    • LGBTQ Estate Planning
    • Pet Planning
    • SECURE Act
    • Special Needs Planning
    • Trust Administration & Probate
    • Young Families
  • Elder Law
    • Coping With Alzheimer’s
    • Elder Law Resources
      • Elder Law Reports
    • Guardianship & Conservatorship
    • Hospice Care
    • Veteran’s Benefits
  • Resources
    • Definitions
    • FREE Estate Planning Worksheet
    • FREE Webinars
    • Estate Administration Legal Guide
    • Estate Planning Articles
      • Questions for Your Estate Planning Attorney Before Creating Your First Estate Plan
      • How to Create Your First Estate Plan in 2022
      • How to Choose a Guardian for Your Child
      • Address These Three Questions in Your First Estate Plan
    • Estate and Gift Tax Figures
    • Frequently Asked Questions
      • Adult Guardianship
      • Alzheimer’s Care
      • Custodial Accounts for Minors
      • Estate Planning
      • FAQs for Families Without an Estate Plan
      • Elder Law
      • IRA & Retirement Planning
      • Is Your Estate Plan Outdated?
      • Legacy Planning
      • LGBTQ Estate Planning
      • Medicare and Social Security
      • Probate
      • Probate Avoidance
      • Irrevocable Trusts
      • Trust Administration
      • Trusts
      • Veterans’ Benefits
      • Wills
    • Newsletters
    • Reports
      • Advanced Estate Planning
      • Basic Estate Planning
      • Estate Planning for Niches
      • Trust Administration
    • Top Estate Planning Techniques
  • Reviews
    • Our Reviews
    • Review Us
  • Medicaid Planning
    • Medicaid Planning
    • Emergency Medicaid & Nursing Home Planning
    • Medicaid Frequently Asked Questions
    • Medicaid Resources
  • Blog
  • Contact Us

Law Office of Michael Robinson, P.C.

Estate Planning Services in Rochester, New York and the Finger Lakes Area

Connect With Us Today

(585) 374-5210
Law Pay Button
Attend a Free Webinar
Home » Wills & Trusts » Frequently Asked Questions about Intentionally Defective Grantor Trusts

Frequently Asked Questions about Intentionally Defective Grantor Trusts

March 18, 2013Wills & Trusts

What is an intentionally defective grantor trust?

The intentionally defective grantor trust (IDGT) is a type of trust that allows one to transfer property into a trust so that the value of that property will not be included in calculating his or her estate and, therefore, will be omitted from estate tax liability.  At the same time, the value of the property transferred into the IDGT is still used in computing the grantor’s federal income tax liability.

How is the IDGT defective?

The IDGT is only defective insofar as the Internal Revenue Service does not consider it to be a separate entity from the grantor when assessing federal income taxes.

What types of powers may establish grantor trust status?

The power to reacquire trust property by replacing it with other property having an equal value, and to do so without the approval of the trustee;

The power to distribute income or principal among the beneficiaries;

The power to add more beneficiaries to the trust;

The power to accumulate or distribute income for the grantor’s spouse;

The power to use trust income in making life insurance premium payments; and,

The right to borrow despite having inadequate security to do so.

What is the benefit of being a beneficiary of an IDGT?

As an IDGT beneficiary, any distributions that are made to beneficiaries from the trust are tax-free.

Is it possible for the grantor to remove the trust’s IDGT status?

Yes. The best approach for doing so is likely to be the inclusion of a provision allowing for this within the terms of the trust.

  • Author
  • Recent Posts
Michael Robinson, Estate Planning Attorney
Michael Robinson, Estate Planning Attorney
Clients notice Michael Robinson’s unique approach to his estate planning practice the minute they walk through his office doors.
Michael Robinson, Estate Planning Attorney
Latest posts by Michael Robinson, Estate Planning Attorney (see all)
  • How Estate Planning for a Family May Trap the Unwary Practitioner - August 31, 2022
  • State Income Taxation of Social Security Benefits - August 24, 2022
  • Understanding Tax Apportionment Clauses - August 17, 2022

Other Articles You May Find Useful

estate planning
What is a Living Trust?
revocable living trusts
Revocable Living Trusts: Who Can Act as Trustee?
Rochester living trust attorneys
Steps for a New Trustee to Take
rochester living trust
Why Your Heirs Would Prefer If You Make a Rochester Living Trust
Naples Trust Attorney
What if You Make the Wrong Kind of Trust?
estate planning attorneys
When is a Will Not Enough?

Primary Sidebar

Law Office of Michael Robinson, P.C.

Blog Subscription

  • This field is for validation purposes and should be left unchanged.

Follow Us

  • Facebook
  • Twitter
  • Linkdin
  • Youtube

TESTIMONIALS

News & Events

Seniors Rock Radio Show Recording 5-1-21

https://drive.google.com/file/d/1U7UkQbEGy-xY7XFAXvX9Qz7pKSVDVV3D/view?usp=drive_web   Author Recent Posts Michael Robinson, Estate Planning AttorneyClients notice Michael Robinson’s unique approach to his estate planning practice the minute they walk through his office doors. Latest posts by Michael Robinson, Estate Planning Attorney (see all) How Estate Planning for a Family May Trap the Unwary Practitioner -... Read more →

Pittsford Office

1163 Pittsford-Victor Road, Suite 120 (Powder Mill Office Park)
Pittsford, NY 14534-3817
Phone: (585) 374-5210
Fax: (585) 485-0394

See Larger Map Get Directions

Map

mrobinson_sidbr_map

Footer

  • Advantages of Working With Our Firm
  • About The American Academy
  • Disclaimer
  • Privacy Policy
  • Sitemap
  • Contact Us

Connect with Us

  • Facebook
  • Twitter
  • Linkdin
  • Youtube
robinson law logo

The Law Office of Michael Robinson, P.C.

Attorney Advertisement


© 2023 American Academy of Estate Planning Attorneys, Inc.