Trusts are a common estate planning tool, and with trillions of dollars expected to change hands as wealth moves from one generation to the next now and in the coming years, various trust types and the tax rules surrounding them are getting more attention.
But that might not be a good thing if the IRS is taking a second look.
In a current high-profile case, the tax agency is challenging how one family used an irrevocable trust strategy to pass wealth to their children.
Although the dispute involves a specialized trust arrangement, its potential broader lesson is worth watching for anyone using high-value trusts in their estate plan. Here’s more to know.