Grantor Trusts
Name two defective grantor trust powers?
Power to add beneficiaries, power to substitute assets, right to borrow without adequate interest or security, power to distribute income to the grantor’s spouse, power to use trust income to pay life insurance premiums
What is the maximum amount that can be distributed as a 65-day distribution?
Greater of trust accounting income or distributable net income, less any amounts previously distributed for that year
In response to Fielding and Kaestner, this state created Form M2RT (Resident Trust Questionnaire)
MN
Any trust that passes these two tests is a domestic trust.
Court test and control test
This person ran for local council.
Paul
Often referred to as “(d)(4)(A) trusts”, this type of trust is required to have a Medicaid payback provision.
First party special needs trust
What is the income distribution deduction for complex trusts?
Income distribution deduction is equal to the lesser of distributions or distributable net income
List two factors states use to determine trust residency.
Testamentary trust created by Will of resident trustor; inter vivos trust created by resident trustor; location of trust administration; resident trustee; resident beneficiary
OB3 increased the qualified small business stock exclusion to this amount.
15M
This person worked for FedEx and once delivered a pallet of OTT worksheets & 1099s to KPMG.
Steve
Which code sections cover the grantor trust rules?
IRC 671-679
This is the maximum amount that a beneficiary must include in their taxable income.
Distributable Net Income (DNI)
The Supreme Court upheld the lower court's decision that the trust lacked sufficient contact with the state to justify the imposition of tax in this 2019 case.
North Carolina vs. Kimberly Rice Kaestner 1992 Family Trust.
This election allows a qualified revocable trust to be treated as part of a decedent’s estate for federal income tax purposes.
This person played hockey from the age of 3 into college then coached their son prior to high school.
Anthony
This power lapses only as to the greater of $5,000 or 5% of the value of the trust assets at the time of the lapse, with any excess withdrawal right continuing on and lapsing in subsequent years.
Hanging crummey power
This is the amount that the trust will have to pay income taxes on.
Trust taxable income
These states have enacted anti-ING legislation.
CA and NY
It has become increasingly common for irrevocable trusts to be modified by ______rather than traditional approaches such as judicial reformation and non-judicial settlement agreements.
Decanting
This person used to Ski every winter until joining HVTT.
Stacey
This type of intentionally defective grantor trust is often used to provide liquidity for the estate.
Irrevocable Life Insurance Trust (ILIT)
What are the three requirements of a simple trust?
1) the terms of the trust agreement require all trust accounting income to be distributed currently, 2) the terms of the trust agreement do not provide for any amounts to be paid, permanently set aside, or used for the tax year for charitable purposes, and 3) the trust does not distribute any amounts during the year other than the trust accounting income required to be distributed currently (i.e. no principal distributions)
This tax may apply to distributions of accumulated income to CA resident beneficiaries.
CA throwback tax
Name one of the questionable trust structures.
INGs, BDITs, BDOTs, FCH trusts
This person's family includes Raul, Christine and Rowena
Mike Macero