Intentionally Defective Grantor Trust (IDGT)

An Intentionally Defective Grantor Trust is an estate planning tool used to protect a home of an individual for estate tax purposes as well as Medi-Cal purposes. The Intentionally Defective Trust is created as a grantor trust with a purposeful flaw that ensures that the individual continues to pay income taxes.

The IDGT can be a very effective estate and Medi-Cal planning tool if structured properly, allowing a person to protect their home, while not allowing for a disqualification period with Medi-Cal while gifting assets to beneficiaries. The grantor of the trust can also retain their property tax and capital gains tax benefits after the home is transferred to the trust