Trust Planning

This article was originally posted on Steve Leimberg’s Business Entities Email Newsletter Archive Message #3174.   “The risk of a reciprocal trust doctrine attack on a non-reciprocal trust doctrine plan is always a possibility. Unfortunately, there are not bright line tests on what power or aggregation of powers might suffice to deflect such an attack.   The simplified…

This article was originally posted on Steve Leimberg’s Business Entities Email Newsletter Archive Message #3032.   The trust compilation can be used to identify ways to backstop, refine and administer the client’s estate and trust plans and could be reviewed and, as necessary, updated at each annual meeting, or even more frequently as circumstances demand. The term ‘binder’…

Originally posted on Forbes.com   Introduction   So, Aunt Jane just asked you to be the trustee of her trust. You were flattered and, of course, accepted. But what did you get yourself into? Too many consumers readily accept fiduciary appointments with little thought of the headaches and liability they may face. While it can…

Originally posted on WealthManagement.com    A recent Chief Counsel Memorandum (CCM) issued by the Internal Revenue Service may have a chilling effect on modifications to all types of irrevocable trusts. CCM 202352018 addressed the gift tax consequences of modifying a grantor trust to add a tax reimbursement clause. The CCM’s conclusion is a departure from precedent and…

Originally posted on Forbes.com   Introduction and Background   Let’s start with a quick refresher to set the stage for an important issue confronting many people who have created trusts. The Corporate Transparency Act (CTA) is a new law that became effective January 1, 2024, for newly formed entities and requires them to file informational…

Originally posted on Forbes.com   Introduction to the CCA   In a recent Chief Counsel Advice (CCA) issued November 28, 2023 the IRS took the position that modification of a grantor trust, with the beneficiaries’ consenting to that modification in order to add a discretionary income tax reimbursement provision for the grantor, resulted in a…

Originally posted on Forbes.com   Immediate Action Advisable   The Corporate Transparency Act (“CTA”) is a new federal law that may affect you in significant and unexpected ways. Since the law only becomes effective January 1, 2024 and entities created before 2024 only have to file January 1, 2025 it seems that most folks are…

Originally posted on Forbes.com   Lesson To Learn   So the moral of this tax tale is that you have to be careful about making sure you file the right tax form to get what you want. We’ll elaborate a bit on the key point in the case to provide more background on trust taxation…