A tax and estate planning attorney has a wide array of tools that can be implemented to help individuals and families save when it comes to gift and estate taxes. Often, these tools come in the form of complex trusts with even more complex sounding acronyms. For instance, Charitable Lead Annuity Trust ("CLAT"), Grantor Retained Annuity Trust "("GRAT"), Qualified Personal Residence Trust ("QPRT"), and the Irrevocable Life Insurance Trust ("ILIT").
On tool, however, is extremely effective and unique--the Intentionally Defective Grantor Trust ("IDGT"). Despite the use of the term "defective", this trust has a tremendous capacity to allow for the maximization of wealth transfers to younger generations with minimal gift/estate taxes.
Not surprisingly, Mitt Romney (one of many politicians) has benefited greatly from the implementation of an IDGT.
From the San Fransisco Chronicle: