Thursday, April 09, 2009

Intentionally Defective Grantor Trusts

What if you paid a significant amount of money to buy something and it was defective?  In one instance, you would be getting exactly what you bargained for.  The intentionally defective grantor trust, sometimes referred to as a grantor defective trust (GDT), is an estate planning tool for the wealthy.

Normally when a grantor establishes a trust for other beneficiaries, the grantor wants to avoid being taxed on the trusts income; however, in the case of the GDT, the grantor intends to pay the tax on the trust’s income.

The GDT is an irrevocable trust.  The trust is set up to accomplish the following 3 goals.  First, the grantor wants to make completed gifts to the trust for gift tax purposes.  Next, the grantor wants to remove the trust assets from the grantor’s estate for estate tax purposes.  Lastly, the grantor wants to intentionally set the trust up in a manner where the grantor continues to pay the income taxes on the assets (in effect making additional gifts).

A Wall Street Journal article, Unusual Trusts Gain Appeal in Unusual Time, reports that this strategy currently has appeal due to the depreciation of many assets and the historically low interest rates.  The article provides an example where a married couple set up a GDT and loaned the trust money to buy their office building.  The couple will receive interest payments for 9 years.

Today’s low interest rates mean that the trust repays the couple less, further benefitting the heirs.  When the loan is repaid, the asset’s appreciation should pass to the heirs both estate and gift tax-free.

24 comments:

Brent said...

I think the current economic environment makes this a great time to utilize this type of trust. What a great estate planning tool to pass on real estate assets.

Anonymous said...

http://nen360.nenonline.org/blog/most-modern-printers-are-made-work-specific-types-ink
http://www.heavenlysins.com/index.php?do=/blog/46760/when-you-use-a-spyware-remover/
http://nen360.nenonline.org/blog/does-mean-end-spyware-we-know-it
http://www.moselbook.de/index.php?p=blogs/viewstory/144331
http://www.mymarburg.com/blog/76809/this-can-%E3%83%9F-%E3%83%A5-%E3%82%A6-%E3%83%9F-%E3%83%A5-%E3%82%A6-%E8%B2%A1-%E5%B8%83-be-even-more-true-if-you-use-refilled-ink-cartridg/
http://prsites.biz/myblog-admin/including-their-target-audience.html
http://sns.cam111.com/blogs/entry/After-subscribing
http://blog.qlep.com/blog.php/218220/718501
http://sns.cam111.com/blogs/entry/including-their-target-audience
http://heraldbulletin.neighborsink.com/node/247765
http://mesmerise.us/jcow/index.php?p=blogs/viewstory/113
http://aaa333333.cocolog-nifty.com/blog/2013/01/the-called-part.html
http://tiredoftalk.org/jcow/index.php?p=blogs/viewstory/741
http://d.hatena.ne.jp/huangshumei/20130128/1359362456
http://cinecloudfilms.com/index.php?do=/blog/92474/that-is-on-your-computer-by-protection-is-better-than-a-cure/

Anonymous said...

http://aaa333333.cocolog-nifty.com/blog/2013/01/get-spybot-prot.html
http://www.bloglog.com/blog/xmyshang6/126482/this-larger-dynamic-range-helps-act-one-displays-show-more-details-r-o-w-a-n-r-i-d-i-n-g-b-o-o-t
http://www.benches2swings.com/vocab/catpath/implementation-u-g-g-%E3%83%96-%E3%83%BC-%E3%83%84-%E9%80%9A-%E8%B2%A9-network-will-begin-later-month.html
http://blog.qlep.com/blog.php/216559/718423
http://www.webshare.cc/blog/b/blog_view.php?mid=547194&id=149&show_bbslink=
http://oriflameblog.cz/forum/topic/the-features-of-led-video-display-include-high-resolution-with-virtual-pixel-tec?replies=1#post-38928
http://xmyishang.exblog.jp/17231359
http://www.hongboit.com/blog/space.php?uid=51830&do=blog&id=485117
http://jiumengshici.hatenablog.com/entry/2013/01/29/111951
http://www.altasbaixarias.baumgarten.cnt.br/jcow/blogs/viewstory/87668
http://www.altasbaixarias.baumgarten.cnt.br/jcow/blogs/viewstory/87669
http://www.bloglog.com/blog/xmyshang6/126031/the-number-experiences
http://jiumengshi.exblog.jp/17708624
http://aaa333333.cocolog-nifty.com/blog/2013/01/which-is-pictbr.html
http://www.toma.jp/blog/aaa333/?entry_id=870947

Anonymous said...

Thank you for sharing. To make sure your personal assets are properly distributed to your friends, family and other beneficiaries, it's a wise idea to form a living trust.
- trusts Beverly .

Anonymous said...

hi!,I really like your writing very much! share we communicate more about your post on AOL?
I need a specialist in this area to resolve my problem.
May be that is you! Having a look ahead to peer you.

Here is my site ... online airplane games
my web page - airplane flying games

Anonymous said...

Hey I am so excited I found your webpage, I really
found you by error, while I was browsing on Askjeeve
for something else, Nonetheless I am here now and would just like
to say thanks a lot for a fantastic post and a all round thrilling blog (I also love the theme/design), I don’t have time to go through it all at
the minute but I have book-marked it and also included your RSS feeds,
so when I have time I will be back to read a great deal more,
Please do keep up the great jo.

Also visit my web site bock of ra kostenlos spielen

Anonymous said...

I do not even know the way I ended up here,
however I assumed this post was great. I don't recognise who you're however certainly you're going to a well-known blogger if you happen to aren't already.
Cheers!

My weblog: robe d avocat

Anonymous said...

Valuable information. Fortunate me I discovered your site unintentionally, and I am stunned why this twist of fate didn't happened in advance! I bookmarked it.

Feel free to visit my webpage; Capsicum Pure X

Anonymous said...

Have you ever considered about including a little bit more than just your articles?
I mean, what you say is fundamental and everything. However think
of if you added some great photos or videos to give your posts more,
"pop"! Your content is excellent but with images and videos, this
site could undeniably be one of the best in its field.
Great blog!

Here is my web site :: lochcarrongarage.com

Anonymous said...

Greetings I am so grateful I located your webpage,
I really discovered you by error, although I was browsing on Aol for anything else,
Nonetheless I am right here now and would just like to say kudos for any remarkable publish and a
all
round exciting blog (I also really like the theme/design),
I never have time to look over all of it at the minute but I've bookmarked it and also extra inside your RSS feeds, so when I have time I'll be back again to study significantly
far more, Remember to do maintain up the great work.

Here is my web blog - build muscle mass

Anonymous said...

i have began herballife 15 times again have misplaced 3 kgs i genuinely dont know if this will function for prolonged time as i do feel like eating some
food sometime

My web page Precision Nutrition System Book

Anonymous said...

Though it's nice to get fast results, I find the healthiest way is to just brush your enamel with toothpaste that has baking soda in it. I have learned from a friend that baking soda is supposed to whiten your enamel, though it doesn't do something health wise.
That's why using toothpaste WITH the stuff in it is the healthiest way to go about it. Just twice a day, or if you're
really dedicated, every time after a meal, for 2 minutes each.


Here is my homepage; dental pro 7 where to buy

Anonymous said...

You can find two simple approaches to acquire fat and build up muscle mass - a education programme, (which includes using weights) as well as a healthy
diet plan. Seems basic? It is. You don't need to have to go out and invest a fortune on protein drinks, supplements and testosterone-enhancing tablets. Muscles want protein and carbs, such as food items that are rife in amino acids.

Also visit my web site - six pack shortcuts insane home fat loss

Anonymous said...

I reside in Dallas. Despite the fact that
you can find practically 20,000 far more males in this town
than girls, this figure can be a little bit deceptive.
There is certainly a higher number of homosexual males,
in addition to immigrant staff, who skew the quantities. All of the locations on
the list appear to be large cities that almost certainly have similar types of
populations. If you're just hunting to get a wonderful spot to celebration then it truly is excellent. If you're seeking for a boyfriend or partner, you will be unhappy.


Here is my web page ... secrets To attract women

Anonymous said...

I blog often and I genuinely appreciate your content.

The article has really peaked my interest. I will bookmark your website and
keep checking for new details about once a week. I subscribed to your Feed as well.


my website :: novoline app cheats

Anonymous said...

An outstanding share! I've just forwarded this onto a co-worker who was doing a little research on this. And he actually bought me lunch because I stumbled upon it for him... lol. So allow me to reword this.... Thank YOU for the meal!! But yeah, thanks for spending the time to talk about this subject here on your internet site.

my weblog :: novoline tricks 2013

Anonymous said...

You are so interesting! I do not believe I have read through a single
thing like that before. So great to find another person with genuine thoughts on this issue.

Seriously.. many thanks for starting this up. This web site is
something that is needed on the internet, someone with a little originality!


Feel free to surf to my blog post :: book of ra android cracked

Anonymous said...

I am really impressed with your writing skills as well as
with the layout on your blog. Is this a paid theme or did you modify
it yourself? Anyway keep up the excellent quality writing,
it is rare to see a nice blog like this one today.

Feel free to visit my site: book of ra kostenlos ohne anmeldung

Anonymous said...

My brother recommended I might like this website.
He was totally right. This post actually made my day.

You can not imagine simply how much time I had spent for this info!
Thanks!

Here is my web site; microsoft office suite

Anonymous said...

Hі there friеndѕ, hoω is all,
and what you wish fοr to say abοut this post,
in my view its trulу amаzing in favor of
me.

Feel free to ѕurf tо my wеb site - abrir cuenta facebook

Anonymous said...

Your mode of describing the whole thing in this post is in fact nice, all can without
difficulty be aware of it, Thanks a lot.

Look into my web-site; Jordan Femme

Anonymous said...

Just wish to say your article is as astounding. The clarity to your put up is simply nice and i can assume you are a professional
on this subject. Well along with your permission allow me to
clutch your feed to keep updated with drawing
close post. Thanks one million and please continue the enjoyable work.


Feel free to visit my web-site :: tedxyse.com

Anonymous said...

This site was... how do you say it? Relevant!! Finally I've found something that helped me. Many thanks!

Also visit my website ... book of ra kostenlos spielen demo

Anonymous said...

I like the helpful info you provide in your articles.
I will bookmark your weblog and check once more here frequently.
I am reasonably sure I will be informed many new
stuff proper right here! Best of luck for the following!



Feel free to visit my web blog: Louis Vuitton Pas Cher