When It's Broke ? Fix It: Reforming Irrevocable Trusts to Change Tax Consequences

Posted: 2 Jan 2001  

F. Ladson Boyle

University of South Carolina - School of Law

Abstract

Several old sayings have a great deal of meaning to lawyers and taxpayers. One is, "nobody is perfect," or said another way, everyone makes mistakes. The other saying, "If it ain't broke, don't fix it," as a corollary: if it is broke, fix it. In the estate planning arena, these two sayings may be combined to yield an important axiom: mistakes happen and trying to correct them is important.

The path to fixing estate planning mistakes requires analysis to determine what errors state courts can remedy and when the Service will accept the modification for tax purposes. This article will examine when state courts may reform irrevocable trusts and when the Service will accept the reformation, or when federal courts have forced acceptance. Moreover, it will propose reformation guidelines that Congress or the federal courts should adopt to provide relief for marital deduction problems similar to the relief granted charitable gifts.

Suggested Citation

Boyle, F. Ladson, When It's Broke ? Fix It: Reforming Irrevocable Trusts to Change Tax Consequences. Tax Lawyer, Vol. 53, No. 4, Summer 2000. Available at SSRN: https://ssrn.com/abstract=253385

F. Ladson Boyle (Contact Author)

University of South Carolina - School of Law ( email )

Main & Greene Streets
Columbia, SC 29208
United States
(803) 777-6885 (Phone)
(803) 777-2368 (Fax)

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