In one of the more important rulings in the last decade, CCA 202352018 modifies our long-standing understanding of grantor trust tax reimbursement clauses. The issue raised by the CCA creates another critical drafting concern. It also compels more careful planning and maintenance for existing grantor trusts. This new IRS guidance forces estate planners and their clients to rethink conventional wisdom regarding drafting, funding, amending, modifying, and decanting irrevocable trusts.

Learning Objectives:

• Understand the IRS’s decision and reasoning in CCA 202352018.
• Be able to identify existing trusts which may be problematic.
• Be prepared to modify drafting practices to help clients avoid future problems.