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An Intentionally defective grantor trust is sometimes used to reduce estate taxes.It works as follows: The grantor creates the trust; The grantor transfers investment assets into the trust, but retains the power to "reacquire the trust corpus by substituting other property of equivalent value".
An intentionally defective grantor trust, or IDGT, is a way of shifting tax burdens for very wealthy households. With this structure, you can create a trust that leaves wealth to your heirs while ...
In United States trust law, an Ultra Trust is a registered trademark [1] whose intellectual property is owned by Estate Street Partners LLC. It describes a specific type of intentionally defective grantor-type irrevocable trust that includes an independent trustee, as well as a special limited power of appointment.
The term "grantor trust" also has a special meaning in tax law. A grantor trust is defined under the Internal Revenue Code as one in which the federal income tax consequences of the trust's investment activities are entirely the responsibility of the grantor or another individual who has unfettered power to take out all the assets. [20]
Estate taxes are a form of transfer tax that affects the very wealthy. For multimillionaire households, avoiding the estate tax is a significant issue. One tool that households can use to try to ...
Continue reading → The post How a Non-Grantor Trust Works appeared first on SmartAsset Blog. One of the most useful estate planning tools is a trust, which can be used to create a legacy of ...
Walton v. Commissioner, 115 T.C. 589 (2000), [1] a decision of the United States Tax Court in favor of taxpayer Audrey J. Walton, "ruled that a grantor's right to receive a fixed amount for a term of years, if that right is a qualified interest within the meaning of Section 2702(b), [2] is valued for gift tax purposes under Section 7520, [3] without regard to the life expectancy of the ...
The rule against perpetuities serves a number of purposes. First, English courts have long recognized that allowing owners to attach long-lasting contingencies to their property harms the ability of future generations to freely buy and sell the property, since few people would be willing to buy property that had unresolved issues regarding its ownership hanging over it.