Will Grantor's Death Affect A Corporation Owned By The Trust
Living trusts and testamentary trusts may only hold S-Corporation stock for 2 years after the date of death of the grantor. After death, the trusts become ineligible shareholders and the corporation will lose its S-election due to the grantor's death. This does not apply to irrevocable trusts which have fidicuary bylaws allowing the trustees to purchase and sell stock by itself and without the grantor's permission, such as the Bulletproof Trust has.
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