IRS PLR: Trust Modifications Do Not Cause Loss of GST-Exempt Status (IRC §2601)

The IRS has published a private letter ruling on I.R.C. §2601, and I.R.C. §2652, concerning the generation-skipping transfer tax consequences of proposed modifications to a trust. Pursuant to the proposed modifications, the daughter and daughter’s descendants would have the same interests they had before the modifications. With respect to each trust, the beneficiary is granted a testamentary general power of appointment under I.R.C. §2041(a)(2) and each trust terminates and vests within the prescribed rule against perpetuities. The grant of the testamentary general power of appointment to beneficiaries of the trusts would cause the trusts to be includible in their gross ...