may choose a certain individual trustee, for example, the grantors
may want to keep a vacation home that hat been a center for family events.
trusts are a valuable estate planning tool for South Dakota legal practitioners.
Although the grantor
cannot change the beneficiaries of the ILIT, the trust agreement could give the grantor
the right to cancel or modify a beneficiary's annual withdrawal rights.
An incentive trust is an irrevocable life insurance trust that can contain "incentive provisions" to encourage certain positive behaviors in beneficiaries that reflect the grantor
's values and motivate beneficiaries to be productive members of society.
This article also reviews a recent ruling (3) in detail; it presents some significant potential problems that might exist when a grantor
dies (or there is any other change of ownership), and suggests actions to take to save the S election.
Postpone full ownership of trust assets until the beneficiaries of the trust have attained ages specified by the grantor
or until events specified by the grantor
trust is a trust for which someone other than the trust bears some or all of the income tax liability.
The value of each gift is calculated based on the age of the grantor
, the length of each trust, the discount taken for minority interest and lack of marketability, and the prevailing IRS interest rate (Section 7520 rate).
Such unfunded trusts are commonly set up as a "defective" irrevocable trust meaning that it will be treated as a grantor
trust for tax purposes and any income will be reported and taxed to the grantor
Second, one or more subsequent conveyances of the subject property by the parties claiming under the instrument must be made and the subsequent instrument must evidence the grantor
's intent to either convey the property or to authorize the conveyance.
some much-needed relief from the documentation requirements.
The income of the trust is taxed to the grantor
, who is treated as the "owner" of the trust for federal income tax purposes.