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How Levi Strauss Employees Can Use Intentionally Defective Grantor Trusts (IDGTs) in Estate Planning

Healthcare Provider Update: Healthcare Provider for Levi Strauss Levi Strauss & Co. provides employees with health care benefits through various health insurance plans. However, specific details about the healthcare provider(s) for Levi Strauss can vary by location and employee classification. Generally, major healthcare providers such as UnitedHealthcare, Cigna, or Anthem may be part of their offerings, but this information is typically outlined in the company's employee benefits documentation. Potential Healthcare Cost Increases in 2026 As healthcare costs continue to rise, 2026 is projected to see significant increases in premiums for health insurance plans, particularly within the Affordable Care Act (ACA) marketplace. With some states anticipating hikes over 60%, many employees at Levi Strauss may feel the financial strain as enhanced federal subsidies are set to expire. This could lead to out-of-pocket premium increases of over 75%, drastically affecting the affordability of coverage and pushing many consumers to reconsider their healthcare options. Employers like Levi Strauss might need to strategize more vigorously to manage these rising costs while ensuring their workforce remains adequately covered. Click here to learn more

“Levi Strauss employees reviewing IDGTs can benefit from understanding how these trusts may support long-term legacy planning, although qualified legal and tax professionals should review these strategies to determine whether they fit into their overall goals.” ~ Wesley Boudreaux, a representative of The Retirement Group, a division of Wealth Enhancement.

“Levi Strauss employees considering an IDGT should recognize how this strategy may support long-term wealth transfer goals, although these structures should be reviewed with qualified legal and tax professionals to determine whether they align with each household’s broader plan.” ~ Patrick Ray, a representative of The Retirement Group, a division of Wealth Enhancement.

In this article, we will discuss:

How intentionally defective grantor trusts (IDGTs) work.
The advantages and potential limitations of using an IDGT.
Key considerations for Levi Strauss employees evaluating this type of planning strategy.

An irrevocable trust arrangement known as an intentionally defective grantor trust (IDGT) allows the grantor to move assets out of their taxable estate while still being treated as the owner of those assets for income tax purposes. Many people, including Levi Strauss employees with high-growth or income-producing holdings, may benefit from using this strategy to support long-term wealth preservation.

How an Intentionally Defective Grantor Trust Works

For tax purposes, different kinds of trusts receive different treatment, and understanding the distinctions can help Levi Strauss professionals review planning strategies more effectively.

Revocable Trusts

In a revocable trust, the grantor is taxed on trust income and is regarded as the owner for income tax purposes. A separate trust income tax return is usually unnecessary. These assets generally remain inside the grantor’s taxable estate because the grantor maintains full control.

Irrevocable Trusts

An irrevocable trust is treated as its own tax entity, filing its own return and taking its own deductions. When properly drafted so the grantor does not retain certain powers or interests, assets transferred to an irrevocable trust are generally removed from the taxable estate, a detail that can matter for Levi Strauss professionals with substantial savings or investment holdings.

How IDGTs Combine These Features

An IDGT is structured as an irrevocable trust for estate and gift tax purposes, removing assets from the taxable estate, but is treated as a grantor trust for income tax purposes. As long as the grantor pays income taxes on trust earnings, the trust’s assets can grow outside the estate, which may appeal to Levi Strauss professionals with long-term legacy goals.

Why It’s Called “Intentionally Defective”

The trust is drafted so that, under IRS grantor-trust rules, the grantor remains the owner for income tax purposes due to certain retained powers. At the same time, the trust is irrevocable for estate tax purposes, allowing the assets to remain outside the taxable estate—a structure that may assist with multigenerational planning.

Advantages of an Intentionally Defective Grantor Trust

Because an IDGT is a grantor trust for income tax purposes, the grantor pays income tax on trust earnings. This leads to two important benefits that may interest Levi Strauss employees with high-value assets:

- Trust assets can grow for beneficiaries without being reduced by income tax payments.
- Income tax paid by the grantor reduces the taxable estate without being classified as a gift.

- This dynamic—where grantors use personal funds to pay taxes that would otherwise reduce trust assets—is often referred to as a “tax burn.”

How Assets Are Transferred to an IDGT

Levi Strauss employees reviewing wealth transfer strategies may encounter two common approaches:

1. Gift or Partial Gift/Sale

A grantor can move assets to an IDGT as a gift. If the gift stays within the lifetime gift and estate tax exemption, it typically does not create out-of-pocket gift tax. Some planning approaches combine a partial gift with a sale to balance estate goals.

2. Sale to the IDGT

Many grantors sell assets to an IDGT in exchange for a promissory note with an interest rate at or above the IRS Applicable Federal Rate (AFR).

- The sale is typically not treated as a taxable gift if conducted at fair market value.
- Appreciation above the AFR occurs outside the grantor’s estate for beneficiaries.
- When AFR rules and loan requirements are followed, the note is treated as valid consideration and carries an interest obligation.

Potential Drawbacks of an IDGT

Once established, an IDGT is difficult to modify, similar to other irrevocable trusts. Outcomes also depend on the trust assets growing at a rate higher than the AFR. If that does not occur, the intended estate planning benefits may fall short—an important consideration for Levi Strauss employees reviewing various asset types.

Who Might Consider an IDGT?

An IDGT can be appealing for families facing potential estate tax exposure, especially when transferring assets with strong growth potential. This approach works best when the grantor has sufficient liquidity to continue paying the trust’s income taxes personally, a factor some Levi Strauss employees review when assessing retirement and estate liquidity. Because the structure requires precise legal drafting, it should be established with qualified legal counsel.

Need Support with IDGTs or Retirement Planning?

The Retirement Group can assist you in reviewing whether an IDGT fits into your broader retirement and estate plan as a Levi Strauss employee. For guidance tailored to your long-term goals, call us at (800) 900-5867 .

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Sources:

1. BMO Wealth Management. Herman, Brad. Intentionally Defective Grantor Trust. BMO Financial Group, Oct. 2021,
https://uswealth.bmo.com/media/filer_public/8b/3f/8b3f85c6-21b0-407e-bfbf-0f9b181c1673/bwm_idgtarticle_1103.pdf .

2. Fidelity Wealth Management. “What Is an Intentionally Defective Grantor Trust (IDGT)?” Fidelity Viewpoints , 4 Dec. 2025,
https://www.fidelity.com/viewpoints/wealth-management/insights/intentionally-defective-grantor-trusts .

3. Hirtle, Callaghan & Co. Estate Planning With Intentionally Defective Grantor Trusts.
Hirtle, Callaghan & Co., 2020,
https://www.hirtlecallaghan.com/wp-content/uploads/2020/08/Intentionally-Defective-Grantor-Trusts.pdf .

4. Nevada Trust Company. Ford-Grella, Jaclyn. “How Intentionally Defective Grantor Trusts Can Safeguard Assets for Future Generations.” Nevada Trust Company , 10 Dec. 2024,
https://www.nevadatrust.com/how-intentionally-defective-grantor-trusts-can-safeguard-assets-for-future-generations/ .

What is the 401(k) plan offered by Levi Strauss?

The 401(k) plan offered by Levi Strauss is a retirement savings plan that allows employees to save a portion of their paycheck before taxes are deducted.

How does Levi Strauss match contributions to the 401(k) plan?

Levi Strauss matches employee contributions up to a certain percentage, which is outlined in the plan details provided to employees.

When can I enroll in the 401(k) plan at Levi Strauss?

Employees at Levi Strauss can enroll in the 401(k) plan during the initial onboarding process or during the annual open enrollment period.

What investment options are available in Levi Strauss' 401(k) plan?

Levi Strauss offers a variety of investment options in their 401(k) plan, including mutual funds, target-date funds, and company stock.

Is there a vesting schedule for the employer match in Levi Strauss' 401(k) plan?

Yes, Levi Strauss has a vesting schedule for the employer match, which means employees must work for a certain period before they fully own the matched contributions.

Can I take a loan against my 401(k) plan with Levi Strauss?

Yes, Levi Strauss allows employees to take loans against their 401(k) accounts, subject to specific terms and conditions outlined in the plan.

What happens to my 401(k) when I leave Levi Strauss?

When you leave Levi Strauss, you have several options for your 401(k), including rolling it over to an IRA or a new employer’s plan, or cashing it out (though this may incur taxes and penalties).

How can I access my 401(k) balance with Levi Strauss?

Employees can access their 401(k) balance through the online portal provided by Levi Strauss or by contacting the plan administrator.

Are there any fees associated with the Levi Strauss 401(k) plan?

Yes, there may be administrative fees and investment-related fees associated with the Levi Strauss 401(k) plan, which are disclosed in the plan documents.

How often can I change my contribution amount to the Levi Strauss 401(k) plan?

Employees can change their contribution amount to the Levi Strauss 401(k) plan at any time, subject to the rules outlined in the plan.

With the current political climate we are in it is important to keep up with current news and remain knowledgeable about your benefits.

Plan Name: Levi Strauss & Co. Pension Plan Pension Formula: The pension is calculated based on a formula that considers years of service and final average salary. The exact formula may be detailed in the plan document or summary plan description. Years of Service and Age Qualification: Typically, employees become eligible for pension benefits after reaching a certain number of years of service, which can vary by plan. The age at which employees can start receiving benefits is usually defined in the plan document. Document: Levi Strauss & Co. Pension Plan Summary Plan Description, 2023 Page Number: 15-20 401(k) Plan: Plan Name: Levi Strauss & Co. 401(k) Savings Plan Eligibility: Generally, employees are eligible to participate in the 401(k) plan after completing a certain period of service or meeting other eligibility criteria defined in the plan document.

Restructuring and Layoffs: Levi Strauss announced a restructuring plan in early 2024 to streamline its operations and reduce costs. This includes a reduction of approximately 300 positions globally. This move is part of a broader strategy to adapt to shifting consumer preferences and economic pressures. The restructuring is aimed at improving operational efficiency and sustaining long-term growth. Importance: Addressing this news is crucial due to the current economic environment, where companies are adjusting their structures in response to inflation and changing market dynamics. Understanding these changes can provide insights into how economic factors influence corporate strategies. Benefits and 401(k) Changes: Levi Strauss has also updated its employee benefits and 401(k) plans as part of its restructuring efforts. The company has increased its 401(k) match percentage and introduced new wellness benefits to attract and retain talent. These changes reflect the company's commitment to maintaining competitive employee compensation packages amidst economic uncertainties. Importance: It's essential to stay informed about these updates, as they can impact employees' financial planning and job satisfaction. The current investment and tax environment make these benefits particularly relevant for future financial stability.

Levi Strauss & Co. offers various stock options and Restricted Stock Units (RSUs) to its employees. Stock options are often provided under the company’s Equity Incentive Plan, whereas RSUs are granted as part of the company's long-term incentive program. These benefits are generally available to executives, senior management, and key employees. Levi Strauss & Co. provides stock options and RSUs to incentivize and retain talent. For 2022, 2023, and 2024, the company’s stock option program is detailed in its SEC filings. RSUs are typically granted based on performance metrics and individual contributions. Levi Strauss & Co. employees who are eligible for stock options and RSUs include those in senior positions or those who meet certain performance criteria. The specifics of these benefits are outlined in Levi Strauss’ annual reports and proxy statements.

Levi Strauss has provided various healthcare benefits to its employees, emphasizing a comprehensive approach to employee wellness. For the years 2022, 2023, and 2024, the company has offered several health-related benefits, including medical, dental, and vision coverage. Levi Strauss has used terms such as “HDHP” (High Deductible Health Plan), “HSA” (Health Savings Account), and “PPO” (Preferred Provider Organization) to describe their health insurance options. Notably, Levi Strauss has also implemented wellness programs focusing on mental health, preventive care, and telemedicine services to enhance employee well-being. The company's healthcare benefits are part of a broader strategy to support employees amid economic uncertainties and evolving tax policies. Recent news highlights Levi Strauss’s continued commitment to adapting its healthcare offerings in response to the current economic and political climate. The company has adjusted its healthcare benefits to address rising costs and changing regulations, ensuring that employees receive adequate support while navigating these challenges. As investment strategies and tax reforms impact the broader economy, Levi Strauss’s proactive approach to healthcare benefits reflects its dedication to maintaining a robust support system for its workforce.