Internal Revenue Code Section 645 was enacted in 1997 because of the increasing use of revocable trusts as will substitutes to avoid probate in many states. While in some states like New Jersey and Texas, probate isn\u2019t terribly expensive or difficult, an increasing number of individuals are designing their estate plans with revocable trusts for non-probate purposes. During the grantor\u2019s life, they may be used for streamlined asset management and a less expensive alternative to guardianships in the event of incapacity. After death, trusts provide increased privacy as well as ease of administration when it comes to out-of-state property and possible inheritance tax freezes that can delay the availability of cash to administer an estate. By making an IRC Section 645 election, clients can treat certain trusts as part of their estate. Here are some of the benefits of doing that.<\/p>\n
Statutory Requirements<\/strong><\/p>\n Section 645 sets forth the statutory requirements for making the election to treat certain trusts as part of an estate. The Internal Revenue Service issued final regulations on Dec. 4, 2002.<\/p>\n