Estate Planning-How Intentionally Defective Grantor Trusts Can Reduce Federal Estate Taxes
The Law Firm of Pozzuolo Rodden, P.C., Philadelphia Estate Planning Lawyers, announces the release of the Estate Planning article “How Intentionally Defective Grantor Trusts Can Reduce Federal Estate Taxes”.
The use of an intentionally defective grantor trust (IDGT) is a clever and efficient way to transfer wealth to your children or future generations, remove assets from your estate, and reduce potential federal estate taxes. In fact, not only can you achieve favorable results with an initial seed deposit to an Intentionally Defective Grantor Trusts IDGT, but you can use additional wealth transferring techniques to enhance those results.
An IDGT is an irrevocable trust established so that you – the grantor – pay income taxes on the trust’s earnings instead of using money from the trust. A grantor will pay tax on a trust’s income and gains when the grantor retains certain powers over, or interests in, the income and/or principal of the trust. For income tax purposes, the IRS considers the retention of these powers and interests to be equivalent to ownership of the trust. Deductions of the trust are attributed to the grantor as well. The trust will be an IDGT if the grantor has any of the following powers and/or interests in the trust…
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