The Internal Revenue Service (IRS) has issued a private letter ruling holding that the generation-skipping transfer tax (GST) exemption will not be affected by a proposed modification to a trust. In the articles example the Trustee and Beneficiaries agreed to a proposal to modify the method of calculating a unitrust amount. The article discusses how the modification was administrative in nature and was not considered to be a shift in beneficial interest. State statute permitted the modification and it did not shift the beneficial interest to a beneficiary on a “lower generation than the persons who held the beneficial interest prior to the modification.” The private letter ruling also held that the modification would not subject the trust to any gift tax and there would be no realization of gain or loss under IRC Section 1001.
See Alison E. Lothes, IRS Considers Proposed Modification To Trust, Wealth Management, July 14, 2015.
Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.
