Powers that make a trust a Grantor Trust

The powers listed below are examples of powers that, if retained by the grantor, should cause a trust to be treated as a Grantor Trust for income tax purposes:

• a reversionary interest in either the corpus or the income of the trust
 

• if the beneficial enjoyment of the corpus or the income from the trust is subject to a power of disposition by the grantor without the approval or consent of any adverse party
 

• certain administrative powers exercisable by the grantor for the benefit of the grantor rather than for the trust beneficiaries, or powers exercisable in a nonfiduciary capacity, including:
   
  
  • the power to deal with trust assets for less than full and adequate consideration
  • the power to borrow trust assets without adequate interest and security
  • other powers exercised in a nonfiduciary capacity by any person without the approval or consent of any person in a fiduciary capacity, including:
     
    
    • power to revoke by the grantor (or grantor's spouse)
    • power to substitute assets of equal value
    • power to add charitable beneficiaries
 

• if income from the trust is used, without the consent of an adverse person, to pay the premiums on a life insurance policy on the grantor’s (or grantor’s spouse’s) life, at least to the extent of such income.