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Craig Lundquist, MBA, ChFC®, CRPC®
VP of Wealth Management
651-773-2757
Kristin Becker
Senior Administrative Assistant
651-773-2821
Ideal Wealth Advisors
Located at Ideal Credit Union
8499 Tamarack Road
Woodbury, MN 55125
CRPC conferred by College for Financial Planning
September/October 2024
Minimize The Estate Tax Bit with an IDGT
The current favorable estate tax exemption amount is scheduled to expire on December 31, 2025, unless Congress acts to extend it or make it permanent. Without action, the exemption amount will revert from $13.61 to $5.6 million per individual, adjusted for inflation. If this could impact you, consider transferring assets out of your estate starting now. With this in mind, this issue begins a series of trust strategies that may help minimize estate tax.
Short Definition
Intentionally defective grantor trusts (IDTs) can transfer wealth to beneficiaries while minimizing estate tax, however the grantor continues to pay income taxes on transferred assets.Setting It Up
Using your available lifetime estate-and gift-tax exclusion, you, the grantor, irrevocably transfer assets you expect to appreciate to the IDGT with no federal gift-tax consequences. Be aware that after the transfer, you can no longer financially benefit from those assets. If the value of the gift exceeds your available tax exclusion, you may sell the asset to the trust on an installment sale basis for a long-term note (say 20 years) and incur no capital gains due to the trust’s irrevocable status. As the assets held in the trust value grow, estate tax on the growth may be avoided for multiple generations.Intentionally defective grantor trusts (IDGT) aren’t for every high-net-worth individual. Your trusted tax and legal professionals can determine if one might be appropriate for you.
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Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. Ideal Credit Union and Ideal Wealth Advisors are not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using Ideal Wealth Advisors, and may also be employees of Ideal Credit Union. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of Ideal Credit Union or Ideal Wealth Advisors. Securities and insurance offered through LPL or its affiliates are:
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