Common use of Modification of trust Clause in Contracts

Modification of trust. A trust that does not comply with one or more of the regulatory requirements under paragraph (b) or (c) of this section will, nonetheless, be treated as satisfying these requirements if the trust is modi- fied, by judicial reformation (or non- judicial reformation if effective under state law), to comply with the require- ments. In the case of a trust created after December 31, 1996, the reforma- tion must be commenced within 90 days after the due date (including ex- tensions) for the filing of the gift tax return reporting the transfer of the residence under section 6075 and must be completed within a reasonable time after commencement. If the reforma- tion is not completed by the due date (including extensions) for filing the gift tax return, the grantor or grantor’s spouse must attach a state- ment to the gift tax return stating that the reformation has been commenced or will be commenced within the 90-day period. In the case of a trust created before January 1, 1997, the reformation must be commenced within 90 days after December 23, 1997 and must be completed within a reasonable time after commencement.