Drafting Do's and Don'ts

Recently, I reviewed an irrevocable generation-skipping transfer (GST) tax exempt trust that provided: "The current and accumulated net income and principal may be distributed to or applied for the benefit of my daughter in such amounts and at such times as the trustees may determine reasonably...

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Bibliographic Details
Published in:Probate and Property 2018-05, Vol.32 (3), p.54-55
Main Author: Liss, Stephen
Format: Article
Language:English
Subjects:
Beneficiaries
Marital deductions
Net income
Personal property
Philosophy
Powers of appointment
Probate
Provisions
Revocable trusts
State court decisions
Trustees
Online Access:Get full text
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Summary:Recently, I reviewed an irrevocable generation-skipping transfer (GST) tax exempt trust that provided: "The current and accumulated net income and principal may be distributed to or applied for the benefit of my daughter in such amounts and at such times as the trustees may determine reasonably necessary for her health, education, maintenance, and support." Even if that is correct, it would be better (and philosophically consistent) to have the revocable trust of the first spouse either (1) retain the personal property in a marital trust or (2) assign it to the revocable trust of the surviving spouse, which should still qualify for an estate tax marital deduction. Revocable trusts don't take title to tangible property by accident, so perhaps the default provision should be to retain tangible property in a marital trust or to direct it to the revocable trust of the surviving spouse to minimize future probate. [...]the trustee can apply income for the HEMS of the beneficiary.
ISSN:0164-0372
2163-0135