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Trust Reformation and Taxes

February 5, 2020, by Daniel McGowan, on New Probate & Trust Cases |

It's important to keep an eye on recent IRS rulings and announcements.  In IRS PLR 201941010 the IRS ruled that the proposed reformation of six trusts would give the beneficiaries no general powers of appointment, that the lapse of their withdrawal rights would not result in a taxable gift, and that the transferors' generation-skipping transfer tax exemptions would be allocated to half of the transfers made to each child's trust in designated years.  The ruling can be read in its entirety here