Internal Revenue Service officials have come out with a draft of a document that could affect how well trust arrangements will protect families’ estates.
IRS officials have published the proposed revenue ruling in IRS Notice 2008-63, which concerns transfers with a retained life estate.
The ruling focuses on a family that creates a private trust company to serve as the trustee of trusts having family members as grantors and beneficiaries.
Officials discuss use of private trust companies by 3-generation families in states that have and have not created private trust company statutes.
In the situations described in the proposed ruling, use of a private trust company as the trustee of a family trust would not cause the value of the trust assets to be included in a grantor’s gross estate, officials write in the draft.
Officials ask for comments about whether additional guidance is necessary for situations involving trust assets that include stock in a controlled corporation or life insurance arrangement.
Comments are due Nov. 4.