Monday, October 31, 2016
PLR 20146014 addressed all the relevant rulings to the tax structure of a DING trust. However, there was one major factual difference compared to what the IRS ruled—if there are fewer than two members serving on the Distribution Committee (or if Child 1 and Child 2 are no longer serving), then the trust terminates and all the property is distributed back to the settlor. In PLR 20146014, the IRS ruled that this trust is a nongrantor trust. Subsequently, in In PLR 201642019, the IRS revoked that ruling, stating that the trust provision addressing the termination acts as a reversion.
See Analysis of DING Trust Rulings PLR 201426014 and PLR 201642019, Morris Nichols Arsht & Tunnell, October 28, 2016.