A sale to a BIDIT should work as well as a sale to an IDIT. 3 August 2022

This presentation will examine the two techniques and draw the conclusion that the sale to a BIDIT (Beneficiary Intentionally Defective Irrevocable Trust) should also be a successful estate planning strategy.

The sale to an Intentionally Defective Irrevocable Trust (IDIT) in exchange for the IDIT’s promissory note has been a popular estate planning strategy since the mid-1990s. A more recent variation of the standard sale to an IDIT technique is the sale to a BIDIT in exchange for the BIDIT’s promissory note. In the case of an IDIT the trust has no provisions that would cause assets that the seller transfers to the IDIT to be included in the sellers’ federal gross estate. This is not the case with a BIDIT. A BIDIT is established by a grantor other than the seller. The seller is granted interests and powers which would typically cause the assets which the seller transfers to the BIDIT to be included in the seller’s estate. It appears that the sale to an IDIT technique works and is actually recognized as effective by the Internal Revenue Service.

Virtual Attendance

Zoom link will be provided prior to the meeting - 12:00-13:00.