Structuring Intentionally Defective Grantor Trusts Under Current Tax Law and the Impact of Potential Tax Law Changes

Recording of a 90-minute CLE/CPE video webinar with Q&A

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Conducted on Thursday, February 24, 2022

Recorded event now available

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Course Materials

This CLE/CPE course will provide estate planners with a comprehensive and practical guide to critical considerations and pitfalls to avoid in structuring intentionally defective grantor trusts (IDGTs). The panel will discuss navigating the tax treatment and fiduciary requirements for defective trusts upon the trustor's death, income allocation rules, post-mortem asset transfer strategies, and tax reporting requirements for defective grantor trusts.

Description

For most taxpayers, estate planning should focus on income tax efficiency while also maximizing the estate tax exemption.

IDGTs, when structured correctly, are very effective for transferring assets and property that will likely appreciate to beneficiaries because they allow the grantor to sell or transfer assets to the trust without recognizing a gain. The sale of an asset to an IDGT is not considered a gift event that would trigger gift taxes, and the sale is not considered a taxable event that would trigger any capital gains tax. Current low interest rates make IDGTs advantageous at this time, but they are not without risks including potential changes to the grantor trust rules, that practitioners should advise their clients of.

The sale of an asset to an IDGT is not considered a gift event that would trigger gift taxes, and the sale is not considered a taxable event that would trigger any capital gains tax. Also, the sale accomplishes the removal of the asset from the taxable estate. Current low interest rates make IDGTs advantageous at this time, but they are not without risks, that practitioners should advise their clients of.

Listen as our authoritative panel of estate planning counsel discusses best practices for determining which clients and assets can most benefit from IDGTs, maximizing the tax advantages, and avoiding the pitfalls associated with this technique.

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Outline

  1. IDGT advantages and applications
  2. Regulatory and statutory requirements
  3. Structuring the trust
  4. Structuring asset transfer transactions to defective trusts
  5. Tax consequences for IDGTs

Benefits

The panel will review these and other key issues:

  • What are the statutory and regulatory requirements for structuring IDGTs?
  • What are practical planning approaches for using IDGTs?
  • What drafting strategies should be used in creating IDGTs?
  • What tax considerations should estate planning counsel consider?

Faculty

Dougherty, James
James I. Dougherty
Partner
Dungey Dougherty

Mr. Dougherty focuses his practice on probate, tax, trust, and estate issues. He assists executors and beneficiaries...  |  Read More

Holloway, Maurice
Maurice D. Holloway
Partner
Nelson Mullins Riley & Scarborough

Mr. Holloway has experience in the formation of corporations, partnerships, and limited liability companies;...  |  Read More

Access Anytime, Anywhere

Strafford will process CLE credit for one person on each recording. CPE credit is not available on recordings. All formats include course handouts.

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