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    Joshua and Laura Meier Newport Beach Trust and Estate Planning Attorneys Focused on Helping Families with Young Kids
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    Oct 31 12

    “Defective” Trusts – A Confusing Name For A Trust That Could Be Ideal For Many Newport Beach Families

    Newport Beach Law Firm

    Defective grantor trust is a really confusing name for something that, in the right circumstances, can be a very good
    idea.  Somewhere along the line somebody
    realized that people might be disturbed by hearing that their trust was
    defective so the term became Intentionally Defective Grantor Trust.  Kind of like – “Hey that defect in your
    trust.  We put it there on purpose.  So you should feel good.”




    Confused ManIf you are an estate planning
    insider, then you understand the legal-speak, the acronyms, and maybe even the
    latest estate law jokes. On the other hand, if you are not, then you may get
    bogged down in some of the insider jargon and, well, find yourself downright
    confused. So it is with “defective” trust planning, as reported in a recent Forbes article titled “Don't Freak Out If You Hear Your Trust Is
    Defective
    .

    The defective grantor trust, and
    more specifically the Intentionally Defective Grantor Trust (IDGT), is more
    often than not the source of confusion estate planning greenhorns face. That’s
    unfortunate. Why? Because so-called “defective” trusts usually work pretty
    well, and they work well precisely because they are defective.

    Here’s the rub: sometimes you
    want your trust to be a trust and sometimes you don’t, and a defective trust
    only fails when you want it to. The heart of the matter, defective or otherwise,
    is simply to say that there is a lot to learn about this weird intersection
    between your life, unique legal entities, and weird tax laws that we call
    estate planning.

    In the end, you should know your
    tools and how to use them. Work with an open and inquisitive mind, and then
    work with Meier Law Firm to examine your options.

    Contact your Newport Beach estate planning attorneys at Meier
    Law Firm to discuss all of your estate planning needs
    .

    Reference: Forbes
    (October 15, 2012) “Don't Freak Out If You Hear Your Trust Is
    Defective




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