Tuesday, November 22, 2011
The decedent was the sole beneficiary of a marital trust created under her husband’s will. The marital trust contained interests in four limited partnerships that were subject to a Buy-Sell Agreement. The decedent established a testamentary charitable lead trust.
Following the decedent’s death, the trustees of the testamentary charitable lead trust inherited a percentage of the marital trust’s limited partnerships from the decedent. The Buy-Sell Agreement, which came into effect upon the bequest, required the executor to sell to the limited partnership the limited partnership interests.
In PLR 201145026 (2011), the IRS ruled that the sale of the trust’s limited partnerships would not constitute self-dealing because the sale qualifies as an estate administration exemption under Treas. Reg. Sec. 53.4941(d)-1(b)(3).
See Brian Spring, PLR 201145026 - Sale of Limited Partnership Not Self-Dealing, Wealth Strategies Journal (Beta 2.0), Nov. 15, 2011.
Special thanks to Jim Hillhouse (WealthCounsel) for bringing this article to my attention.