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GST Tax for a predeceased relative Expand / Collapse
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Posted 10/4/2007 2:32:41 PM
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Husband and Wife created a living trust with the beneficiaries being their sons Al and Ralph.  Al has two sons and Ralph has no heirs.  The trust states that if Ralph predeceases the second parent to die (which he did), his inheritance would go to Al's children.

Is there a way to avoid GST on Ralph inherentance that will go to Al's sons?  I do not think the predeceased parent rule applies. 

Thanks John

John Weldon

Post #456
Posted 10/7/2007 12:55:09 PM
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Here is my thought.

Al's children may disclaim their interest, see probate code sections 260 - 285. I don't know the disclaimer code section for title 26 of the IRC, but believe disclaimer rules are similar.

The disclaimed share would then go according to the trust, likely to Al.

 

Bradley Hindley, Esq.

Post #458
Posted 10/7/2007 6:25:40 PM
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You are correct in saying that the deceased parent rule does not apply in this case. I looked at Section 2651(e) hoping that there would be some generational assignment language that would help but there is none.

If the GST exemption has not been previously allocated, that's your only hope. At least that may provide a reduction in the tax.

Mary Kay Foss

Post #459
Anonymous
Posted 10/8/2007 3:36:07 PM




It seems to me that any of the trust's assets included in the estate of the second to die parent and passing to the grandkids would be eligible for the move-up rule. The deemed allocation rules when the first parent died may well have operated to exempt any assets passing to the grands from a credit shelter trust.
Post #460
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