(HARRISBURG) – Legislation to simplify and streamline the process for irrevocable grantor trusts was unanimously passed by the Pennsylvania Senate, according to Senator Lisa Baker (R-20), who introduced the measure.
An irrevocable grantor trust is a type of trust that cannot be modified, amended, or terminated, without the permission of the grantor’s beneficiaries. These types of trusts are often established by someone as a means of reducing taxes and protecting property. In many cases the grantor, who establishes the trust, wants to pay the income taxes, so that the trust’s beneficiaries are not negatively impacted. Senate Bill 1321 would remove the present barrier, allowing grantors to meet this obligation if they choose to do so.
“This option has been available at the federal level for decades, and we are the only state that does not permit the grantor of a trust to pay any income taxes that may be due,” Senator Lisa Baker said. “It is our hope that this legislation will increase our competitiveness and encourage establishment of trusts here in Pennsylvania while simplifying the process for taxpayers.”
Senator Lisa Baker noted that the bill was developed with and is supported by the Joint State Government Commission’s Advisory Committee on Decedents’ Estates Laws.
Senate Bill 1321 has been sent to the House of Representatives for consideration.
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