In PLRs 201532008, 201532009, 201532010, 201532011, 201532012, 201532013, the Service made the following rulings relating to a trust division pursuant to a  settlement agreement:

(1) The terms of the Settlement Agreement, including the Trust division and the construction of the phrase “by right of representation,” will not cause a distribution from or the termination of any interest in Trust, Trust A, or Trust B to be subject to the generation-skipping transfer tax.

(2) The terms of the Settlement Agreement, including the Trust division and the construction of the phrase “by right of representation,” will not cause any person to make a gift to any beneficiary of Trust,
Trust A, or Trust B.

(3) The terms of the Settlement Agreement, including the Trust division and the construction of the phrase “by right of representation,” will not cause the assets held in Trust, Trust A, or Trust B to be included in the gross estate of a beneficiary who dies prior to the termination of such trust.

(4) Following the termination of Trust and the resulting division of Trust pursuant to the Settlement Agreement, Trust A and Trust B will be treated as separate trusts.

(5) The terms of the Settlement Agreement, including the Trust division and the construction of the phrase “by right of representation,” will not cause any party to the Settlement Agreement to realize income from the sale or exchange of any Trust assets or interests.

 

For the full PLRs,  see 201532008, 201532009, 201532010, 201532011, 201532012, 201532013.

Posted by Lewis J. Saret, Co-General Editor, Wealth Strategies Journal.