Romney’s [estate planning] vehicle is known as an “intentionally
defective grantor trust” or by the acronym IDGT — hence the nickname: “I Dig
It.” Such trusts permit donors to give potentially unlimited amounts to
children free of estate and gift taxes.
All politics aside, the presence
of an individual as financially savvy as Mitt Romney atop the Presidential
debate stage brings some important estate planning lessons into the public
view. Not least amongst them is the “Intentionally Defective Grantor Trust” and
the acronym-turned-message, “I DiG IT.”
Romney and his use of the IDGT
(accordingly pronounced, “I DiG IT,” if you aren’t into spelling out your
acronyms) were the subject of a recent article in Bloomberg News titled “Romney
‘I Dig It’ Trust Gives Heirs Triple
Benefit.” IDGTs are used by Republicans, Democrats and Independents.
A popular wealth transfer
strategy among estate planning attorneys, the IDGT provides a “triple benefit”
to taxpayers who employ it. The key, as with so many wealth transfers, is to
place unappreciated assets in an IDGT and thereby shelter them as they grow. If
the assets then appreciate in the IDGT, then the transfer will ultimately
maximize the wealth transferred and minimize the attending taxation.
To learn more about this popular
IDGT strategy and how it may benefit you (and your loved ones), check out the
original article and contact your estate planning attorney to explore whether
it may be an appropriate strategy for you.
For more
information on estate planning and elder law issues, please visit our website, sign up for our free monthly e-newsletters
or read our past blog posts.
Reference: Bloomberg
(September 27, 2012) “Romney
‘I Dig It’ Trust Gives Heirs Triple
Benefit”