"A typical POA document is framed so that the chosen attorney can stand in the
grantor's shoes and exercise as many powers as required to look after the
grantor's interests.
* The Delivery Requirement Can Be Satisfied, Even When a Condition Is Imposed by the
Grantor, When the Proponent of the Deed Can Demonstrate the
Grantor Relinquished All Control as to Satisfaction of the Condition Requirement, and the Ability to Revoke the Deed--The requirement for a condition precedent to be satisfied, such as payment for a conveyance of real property, is certainly not unusual; however, instances in which the condition is not to be satisfied until after the death of the
grantor may be sufficient to satisfy the delivery requirement of a deed to a grantee.
Because the trust has been created as irrevocable (and provided that none of the powers retained by the
grantor would cause estate tax inclusion) it will be respected as a legally valid trust entity for estate tax purposes.
The gun trust gives the successor trustee broad language in order to deal with the
grantor's firearms.
Grantor trusts are permitted to use the
grantor's Social Security number (SSN) as their TIN [Treasury Regulations section 1.67M(b)(2)(A)].
But for tax purposes, the completed transfer to a trust can be deemed an incomplete gift due to the
grantor's retaining certain powers over the trust.
(7) However, subsequent to an inversion of the income tax rates in 1986, (8) many commentators argue that
grantor trusts have outlived their usefulness and should therefore be eliminated or drastically reformed.
For example, a revocable living trust is a
grantor trust (income taxed to the
grantor) and included in the
grantor's estate.
The new proposal would include the trust assets in the
grantor's estate so that they would be subject to estate taxes.
Another way for a
grantor to gain indirect access to trust assets is through loans from the trustee to the
grantor's spouse.
The
grantor (business owner) creates the GRAT trust and transfers the business to the trust.
(See Q 307 regarding life insurance trusts, Q 844 as to
grantor trusts, and Q 310 as to when trust income is taxable to someone other than the
grantor, the trust or the beneficiary.) (8)
