Trust Amendment

Submitted by Alan - IRA critic on Tue, 2019-12-31 01:16

The following paragraph from an estate attorney mentions trust amendments to accomplish certain goals including removal of qualifying status. Can’t the trustee simply decline to certify the trust information by the 10/31 deadline to accomplish the same thing and/or send the IRA custodian a letter on that date stating the intention to deny qualified status by declining the trust info?

“Planners may want to consider giving a trust protector or independent trustee the power to change a conduit trust to an accumulation trust or vice-versa, or to change the status of a trust from designated beneficiary to non designated beneficiary or vice versa. To be recognized under the rules determining who is a beneficiary, any such amendment needs to be made no later than September 30 of the calendar year following the calendar year of the owner’s death. That will provide maximum flexibility to adjust to future changes in the law and the beneficiaries’ circumstance so that the trust protector or independent trustee can determine the optimum structure to protect beneficiaries or save income tax.

This article is not intended to provide legal or tax advice. Please consult an appropriate professional to advise you whether these ideas might help your particular situation.

Steve Gorin is a nationally recognized practitioner in the areas of estate planning and the structuring of privately held businesses. Scott Bieber represents clients in the areas of family wealth preservation, federal transfer taxation, and family business planning. “



Submitted by Bruce Steiner on Tue, 2019-12-31 03:38

  • Steve Gorin is indeed a well-respected and nationally known trusts and estates lawyer.  But I think this creates unnecessary complexity.   I said this back in 2005 or so when someone in California first proposed it.
  • Conduit trusts rarely made sense even under the old law since they forced out all of the assets, throwing them into the beneficiary’s estate and exposing them to the beneficiary’s creditors and spouses, albeit not all at once.  They make even less sense now, since they generally force out all of the assets within 10 years.
  • It’s almost always much better to have a discretionary (accumulation) trust.  That provides more flexibility.  If the trustees think it’s best in any given year to distribute some or all of the amounts they receive from the IRA, they may do so.  But they’ll have the discretion to accumulate some or all of the amounts they receive from the IRA in any year they think that’s best.  
  • Bruce Steiner

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