Tips From the Pros: CCA 202352018–Tip of The IcebergTips From the Pros: CCA 202352018–Tip of The Iceberg

It’s no hyperbole to say that Chief Counsel Advice (CCA) 202352018¹ has taken center stage in the estate-planning world. It shouldn’t come as a surprise. It was just a matter of time.

Facts and Conclusion

“A” established and funded an irrevocable trust. Under the governing instrument, A retained a power causing A to be the deemed owner of the trust under Internal Revenue Code Section 671. As required by the trust instrument, the trustee wasn’t related or subordinate to A within the meaning of IRC Section 672(c). The trustee had absolute discretion to distribute income and principal to A’s child. At A’s child’s death, the remaining trust property was to be distributed to A’s child’s issue, per stirpes.

Neither state law nor the trust instrum...