Using the IDGT (Intentionally Defective Grantor Trusts) to Protect Your Personal Residence.
As you know if you've been reading my newsletters for any amount of time, I believe that NO estate or financial plan can be complete if they do not incorporate asset protection.
IDGTs (Intentionally Defective Grantor Trusts)
Most advisors are not aware of the power of IDGT when it comes to "advanced" estate and business transition planning. Having said that, this discussion will focus not on a capital gains, income, estate, or gift tax play with an IDGT, but instead will focus on how to use an IDGT for "asset protection."
The steps for using an IDGT (Intentionally Defective Grantor Trust) to protect the personal residence
Frequently Asked Questions: Protecting your personal residence with the Intentionally Defective Grantor Trust (IDGT)
– Is the rent deductible to the client? No.
– Is the rent income to the IDGT? No.
– Is the installment note payment to the client from the IDGT income to the client? No.
– Can the note be accelerated? Yes. If the client ultimately would like the house sold, that can be accomplished in the IDGT and the proceeds can be paid to the client through an accelerated installment note payment.
– What happens if the property has a mortgage? The IDGT would make the mortgage payments which would still be deductible to the client/grantor as if the house is owned individually.
Summary of the IDGT
This newsletter is not meant to give you chapter and verse for how to use an IDGT (Intentionally Defective Grantor Trusts) to protect the value of a personal residence. Instead, the newsletter is simply meant to make you aware of the fact that an IDGT can be used to protect the residence. If you have wealth and significant equity in your homes, Estate Street Partners can discuss with you on how to protect your home's equity.
About the Ultra Trust®:
- Part 1 - Estate Street Partners
- Part 2 - What is the Ultra Trust®?
- Part 3 - What is a Trust?
- Part 4 - Asset Protection Plan
- Part 5 - Asset Protection Eligible Assets
- Part 7 - What is Probate?
- Part 8 - What is Estate Tax?
- Part 9 - Medicaid Spend Down Rules
- Part 10 - What is the Ultra Trust®?
- Part 11 - Irrevocable Trust Benefits
Read more articles on irrevocable trust asset protection:
To learn more about irrevocable trusts and senior elder care visit:
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- Asset Protection Joint Tenancy Community Property
- Irrevocable Trust Assets Property Ownership
- Dividing Irrevocable Trust Assets Property
- Land Trust: Revocable Living Trust
- Qualified Personal Residence Trust