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Bill Lipkind's 2016 ING Update

LISI Estate Planning Newsletter #2373

January 8, 2016

Author: William D. Lipkind

Bill Lipkind (Partner-New Jersey) provides important commentary on a recent development dealing with incomplete non-grantor trusts (INGs) in the January 8, 2016, issue of the LISI Estate Planning Newsletter (#2373). The article discusses a Private Letter Ruling issued by the IRS in response to a strategy that Bill created on behalf of one of his tax clients, which was the subject of an article in 2013, as well as an accounting of updates reflected in an “improved” strategy that was approved by the IRS in the recent PLR 201550005.

INGs are used to transfer wealth not subject to state taxation as “source income” into trusts that are domiciled in states that permit self-settled spendthrift trusts and do not tax such trusts on undistributed income. After a hiatus of six years, the IRS resumed issuing Private Letter Rulings for such trusts with PLR 201310002, the first of four PLRs written in response to a strategy Bill devised on behalf of one of his clients that achieved the tax goals of an earlier ruling but that also overcame objections of the IRS. Bill recently updated his strategy and the IRS issued PLR 201550005. In the article, Bill takes a look at the differences between the two PLRs.

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