When and why might an irrevocable trust make a loan to a beneficiary or the grantor who created the trust?
Why would a trustee want to make loans from a trust to a beneficiary?
What are the financial and tax consequences?
What are the criteria for a transfer to be respected as a loan by the IRS and creditors?
What factors should be documented?
What are the different tax treatments of a loan versus a distribution or other characterization of the transaction?
What are the benefits of having a non-fiduciary have an express power to loan trust assets to the grantor who created the trust?
Using the power to loan to support characterization of the trust as a grantor trust for income tax purposes (a swap power may not be 100% guarantee of that result). IRC Sec. 675. How can a loan power provide access to trust assets for taxpayers trying to use exemption?
What risks might loaning the grantor trust assets pose?
What interest rate might be charged?
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Martin M. Shenkman is an attorney in private practice in Fort Lee, NJ, and New York City. His practice concentrates on estate and tax planning, planning for closely held business, and estate administration. Mr. Shenkman is an author of over 42 books and more than 1,000 articles. He is an editorial board member of Trusts & Estates Magazine and the Matrimonial Strategist, and an advisor for InterActive Legal. He is the recipient of many awards including being a 2013 recipient of the prestigious Accredited Estate Planners (Distinguished) award from the National Association of Estate Planning Counsels. Mr. Shenkman was named Financial Planning Magazine 2012 Pro-Bono Financial Planner of the Year for his efforts on behalf of those living with chronic illness and disability. Investment Adviser Magazine featured him on the cover of its April 2013 issue naming as the lead of their “all-star lineup of tax experts.”
Mr. Blattmachr is a Principal in ILS Management, LLC and a retired member of Milbank Tweed Hadley & McCloy LLP in New York, NY and of the Alaska, California and New York Bars. He is recognized as one of the most creative trusts and estates lawyers in the country and is listed in The Best Lawyers in America. He has written and lectured extensively on estate and trust taxation and charitable giving.
Mr. Blattmachr graduated from Columbia University School of Law cum laude, where he was recognized as a Harlan Fiske Stone Scholar, and received his A.B. degree from Bucknell University, majoring in mathematics. He has served as a lecturer-in-law of the Columbia University School of Law and is an Adjunct Professor of Law at New York University Law School in its Masters in Tax Program (LLM). He is a former chairperson of the Trusts & Estates Law Section of the New York State Bar Association and of several committees of the American Bar Association. Mr. Blattmachr is a Fellow and a former Regent of the American College of Trust and Estate Counsel and past chair of its Estate and Gift Tax Committee. He is author or co-author of eight books and more than 500 articles on estate planning and tax topics.
Among professional activities, which are too numerous to list, Mr. Blattmachr has served as an Advisor on The American Law Institute, Restatement of the Law, Trusts 3rd; and as a Fellow of The New York Bar Foundation and a member of the American Bar Foundation.
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