All politics aside, the presence of an individual as financially savvy as Mitt Romney atop the Presidential debate stage brings some important estate planning lessons into the public view. Not least amongst them is the “Intentionally Defective Grantor Trust.”
Romney and his use of the IDGT (accordingly pronounced, “I DiG IT,” if you aren’t into spelling out your acronyms) were the subject of a recent article in Bloomberg News titled “Romney ‘I Dig It’ Trust Gives Heirs Triple Benefit.”
A popular wealth transfer strategy among estate planning attorneys, the IDGT provides a “triple benefit” to taxpayers who employ it. The key, as with so many wealth transfers, is to place unappreciated assets in an IDGT and thereby shelter them as they grow. If the assets then appreciate in the IDGT, then the transfer will ultimately maximize the wealth transferred and minimize the attending taxation.
Not surprisingly, the IDGT has many fans among those who have employed it to shelter massive sums from estate and gift taxes; on the flip side, there are many who would like to see it abolished as providing an unfair tax break to the wealthy.
But regardless of where you stand from a political perspective, the fact remains that the vehicle is extremely effective and is still available – at least for the time being. To learn more about this popular IDGT strategy and how it may benefit you (and your loved ones), check out the original article and contact us here at Peak Legal Group to explore whether it may be an appropriate strategy for you.
Reference: Bloomberg (September 27, 2012) “Romney ‘I Dig It’ Trust Gives Heirs Triple Benefit”