Please double-check your research on your assertion that the "grantor pays no income tax on trust earnings." I believe the idea of an IDGT is that the grantor DOES pay the tax, but it is left out of his estate. You say as much in your reference to the proposed legislation change, which effectively ties an owner for income tax purposes to ownership for estate tax purposes.

Steve Mogdis
Law Office of Kevin Adams, PLLC
Livonia, MI