The Joint and Survivor Grantor Trust and the S Election

In the article linked below, the authors explain why, following the death of the first spouse, a joint and survivor grantor trust remains an eligible S corporation shareholder for which no electing small business trust or qualified subchapter S trust election is required until after the death of the surviving spouse. The article is followed by commentary from Jonathan G. Blattmachr, F. Ladson Boyle, Howard M. Zaritsky, and Philip M. Lindquist, and the authors’ response to those comments.


The joint and survivor grantor trust (JSGT) is a non-foreign irrevocable trust jointly created by a married couple and funded by them with S corporation shares, subject to retained joint and survivor borrowing and substitution powers under section 675. Consider the following example.

A married couple, H and W, jointly and equally own 1 shares of an S corporation. They create a JSGT for the benefit of their child and transfer the S shares to that trust. By the express terms of the trust agreement, H and W jointly retain powers described in section 6752 that qualify the trust as a permitted S corporation shareholder under section 1361(c)(1)(A) and (2)(A)(i). The jointly retained powers extend to the entire trust and are exercisable for the benefit of H, W, or both at any time while either of them is living.

Read the full article with Letters to the Editor

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