A Beneficiary as Trust Owner: Decoding Section 678

ACTEC Journal, Vol. 35, No. 2, p. 35, Fall 2009

Hofstra Univ. Legal Studies Research Paper No. 10-06

17 Pages Posted: 25 Nov 2009 Last revised: 28 Mar 2010

See all articles by Jonathan G. Blattmachr

Jonathan G. Blattmachr

Milbank, Tweed, Hadley & McCloy LLP

Mitchell M. Gans

Hofstra University - School of Law

Alvina H. Lo

Credit Suisse Private Banking

Abstract

This article explores the circumstances under which a person who does not contribute property to a trust can be considered its "owner" for income tax purposes. The article focuses particularly on whether the a beneficiary's power to distribute trust property to himself or herself, subject to an ascertainable standard, should be treated as the income tax owner of some portion of the trust property. The article then examines whether a holder of an unrestricted power of withdrawal that has lapsed may continue to be treated for income tax purposes as the owner of some portion of the trust property.

Keywords: grantor trust, income tax, trust, ascertainable standard, right of withdrawal, lapse, 687

JEL Classification: K19, K34

Suggested Citation

Blattmachr, Jonathan G. and Gans, Mitchell M. and Lo, Alvina H., A Beneficiary as Trust Owner: Decoding Section 678. ACTEC Journal, Vol. 35, No. 2, p. 35, Fall 2009, Hofstra Univ. Legal Studies Research Paper No. 10-06, Available at SSRN: https://ssrn.com/abstract=1511910

Jonathan G. Blattmachr (Contact Author)

Milbank, Tweed, Hadley & McCloy LLP ( email )

1 Chase Manhattan Plaza
New York, NY 10005
United States
212-530-5066 (Phone)

Mitchell M. Gans

Hofstra University - School of Law ( email )

121 Hofstra University
Hempstead, NY 11549
United States
(516) 463-5876 (Phone)

Alvina H. Lo

Credit Suisse Private Banking ( email )

Eleven Madison Avenue
New York, NY 10010
United States

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