How does an Intentionally Defective Grantor Trust (IDGT) work?
Zell Law, PLLC ·
An Intentionally Defective Grantor Trust (IDGT) is a type of grantor trust, which means the grantor pays the income tax earned by the trust. When you hear the term “intentionally defective,” you may think the trust is broken or somehow ineffective. An IDGT is a trust that is “defective” only because it is ignored for income tax purposes. The IDGT is very effective by helping beneficiaries avoid gift and estate taxes.
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