IDGTs and Installment Sales to Grantor Trusts
The intentionally defective grantor trust, sale-to-IDGT freeze, seed gifts, self-canceling notes, and basis considerations.
What this guide covers
- An IDGT is estate-excluded but income-taxed to the grantor; the grantor's tax payments are tax-free transfers.
- Sales/swaps between grantor and IDGT are income-tax nonevents, enabling an installment-sale freeze at the AFR.
- Seed the trust (~10%) so the note is respected; IDGT sales avoid GRAT mortality risk and are GST-friendly.
- Carryover basis and the death-of-grantor note question are the principal cautions.
The full guide includes the detailed analysis, worked examples, statutory citations, and related resources below.
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Educational reference, not legal advice. Prepared for licensed professionals as general reference; not legal advice and no attorney-client relationship is created. Law varies by state and changes over time — verify transfer-tax figures and statutory citations against current primary authority. This resource was last updated 2026-07-31. Estateur is not a law firm.