Joint trusts may fail in their purpose of being convenient, and create more headaches when the terms of each trust and assets segregated at the death of the first spouse is unclear. A private letter ruling illustrates possible problems that may occur, which involved the failure to segregate trust assets between the family trust and the survivor’s trust based on erroneous advice from a previous estate attorney. After the surviving spouse’s death the estate was seeking to exclude the family trust assets from the estate.
In PLR 201429009, the IRS allowed the family trust assets to be excluded, because the new attorney backed up the correction of the problem through accounting and forensic financial review.
See John P. Dedon, Joint Trusts – Helping or Hurting? re: Estate Planning, The National Law Review, Apr. 9, 2015.
Special thanks to Jim Hillhouse for bringing this article to my attention.
