Sale to an IDIT for a Life Annuity: Confronting the Exhaustion Test and Other ChallengesDecember 2016 – Bloomberg BNA: Tax Management Memorandum
Michael D. Mulligan's article, "Sale to an IDIT for a Life Annuity: Confronting the Exhaustion Test and Other Challenges" explores both the sale to an Intentionally Defective Irrevocable Trust (IDIT) in exchange for a standard promissory note and also the sale in exchange for an annuity for life. Mike focuses on the necessary steps to take to avoid potential application of §2036(a)(1) and §2702. The article identifies situations in which use of a sale to an IDIT in exchange for an annuity for life might be utilized. Finally, Mike compares the annuity for life with a self-canceling installment note, or SCIN.
To read the full article, click under "Resources" below.
Mike Mulligan is Co-chair of the Estate Planning Department of Lewis Rice. He is an originator of the estate planning strategy of sale to defective trust for an installment note, which is now widely used by estate planners nationally. Mike is a member of the Editorial Boards of Estate Planning and The Journal of Taxation and is a fellow of the American College of Trust and Estate Counsel.