[WSBAPT] S-Corp Stock in Trust - QSST form?

[Jane Bitz]

Hi All:

I have a client that owns shares in a private bank that was established by a distant relative, over 150 years ago. The shares are all owned by relatives of the original founder of the bank. Before the client's father died, the Bank converted from a C-Corp and is now an S-Corp, subject to the ownership limitations of that form of ownership. We would need to seek permission from the bank before transferring the shares to the Trust.

Client also owns a family cabin. He wants to place the cabin property and the S-Corp shares in an irrevocable trust for the benefit of his children & grandchildren. My research shows that a "grantor" trust can be the owner of S-Corp shares, but I am unsure if an irrevocable trust would be considered a grantor trust by the IRS. The reason for the irrevocable trust is that he would like to start the 5 year look back on gifts for Medicaid qualifying in case he or his wife require long term care as they age.

Does anyone have expertise in this area that would be willing to share a form for a Qualified Subchapter S Trust language?

Thanks,
Jane.

Jane G. Bitz
Of Counsel
Wolff, Hislop & Crockett, PLLC
12209 E. Mission Ave, Suite 5
Spokane Valley, WA 99206-4824
(509) 927-9700 x126
FAX: (509) 777-1800


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