Can the grantor be the trustee of an IDGT?

On the one hand, the grantor must give up dominion and control over the IDGT to avoid inclusion of the trust’s property in the grantor’s gross estate. IRC §§ 2036–2042. In this regard, some IDGTs expressly prohibit the grantor, or anyone related or subordinate to the grantor, from ever becoming a trustee.

Should you be the trustee of your own trust?

The general rule of thumb, however, is that if the trust is revocable, appointing yourself as the Trustee may be beneficial; however, if the trust is irrevocable, it is usually not wise to be your own Trustee.

Do you name yourself as trustee?

Typically, you’ll name yourself as the “trustee” of your trust. This means that while you are alive, you retain control of the trust and its property. In your trust document, you will also name a “successor trustee” to take over and manage the trust (distribute your property) after you die.

Can grantor serve as trustee of irrevocable trust?

While a grantor may technically be allowed to serve as the trustee of an irrevocable trust he creates, this can cause some problems. Often the grantor will choose his spouse, sibling, child, or friend to serve as trustee.

What is the difference between a grantor and a trustee in a trust?

A grantor is the entity that establishes a trust and legally transfers control of those assets to a trustee, who manages it for one or more beneficiaries. In certain types of trusts, the grantor may also be the beneficiary, the trustee, or both.

Can grantor be trustee of irrevocable trust?

Can you appoint yourself as a trustee?

From a legal standpoint, you can appoint yourself as the Trustee of any trust you create, whether it is a revocable or irrevocable trust. Once the trust has been established you transfer all major assets into the trust. As long as you are capable, you control and manage those assets as the Trustee of the trust.

Who should I appoint as trustee?

Depending on the type of trust you are creating, the trustee will be in charge of overseeing your assets and the assets of your loved ones. Most people choose either a friend or family member, a professional trustee such as a lawyer or an accountant, or a trust company or corporate trustee for this key role.

How do I legally appoint a trustee?

Usually, the court appoints the trustee named in the will. This is similar to the court appointing the executor named in the will. Since the appointment comes from the court, the trustee is responsible to the court and must account to it at various times.

Who can you appoint as a trustee?

Should the grantor be the trustee of the trust?

The key benefit of letting the grantor be trustee, and the one most important to clients, is maintaining control. Most people who have worked their whole lives accumulating assets are not ready to just turn them over to the kids or other third parties.

Can a person act as their own trustee?

One primary reason a person might act as his or her own trustee is the fact that, as would be expected, a trustee will expect compensation for undertaking the work of managing the trust as well as taking on the legal risk that comes with it.

Can a beneficiary and settlor of a trust be separate people?

That said, there is no requirement that these all be separate people. In fact, the same person who acts as settlor of the trust in funding it can also act as the trustee for the trust as well as be the beneficiary of the trust.

Can a trust challenge the IRS in court?

The trust challenged the IRS in court. The IRS argued that since Fred had left himself the power to appoint himself the trustee, that he had sufficient control over the trust and should therefore be taxed on it. The trust argued that he never was the trustee and therefore the assets should not be taxed.