BarbriSFCourseDetails
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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Estate Planning

Date & Time
  • event Date

    Tuesday, October 4, 2022

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.

  • BARBRI is a NASBA CPE sponsor and this 110-minute webinar is accredited for 2.0 CPE credits.

  • BARBRI is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).

$297.00
CLE
CPE
ALL

This course will provide a comprehensive and practical guide to structuring a beneficiary deemed owner trust (BDOT). The panel will discuss the provisions of Section 678 in depth, detail the income tax benefits of granting beneficiaries' withdrawal rights over trust income but not principal, and distinguish BDOTs from beneficiary defective inheritor's trusts and other similar structures.

Faculty

Maurice D. Holloway
Partner
Nelson Mullins Riley & Scarborough LLP

Mr. Holloway has experience in the formation of corporations, partnerships, and limited liability companies; structuring like–kind exchanges; estate and business succession planning; probate administration, trusts and estates litigation, and mergers and acquisitions

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Blake G. Betheil
Partner
Nelson Mullins Riley & Scarborough LLP

Mr. Betheil's practice primarily focuses on estate planning and asset protection planning for a wide array of affluent individuals and their businesses. He advises individuals owning family wealth or closely held businesses regarding tax planning, inter–generational transfers of wealth, charitable giving, and transfers of business interests. Mr. Betheil has extensive experience in international estate planning, including U.S. tax planning for multinational families and for nonresident aliens owning U.S. real estate.

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Description

Structuring a trust as a BDOT can provide significant income and transfer tax savings by taking assets out of the fiduciary tax regime while allowing beneficiaries a degree of control and access over trust income. The BDOT is a trust that grants beneficiaries the power to withdraw taxable income.

Section 678 generally provides that a trust beneficiary shall be treated as the trust owner if the beneficiary has the power to withdraw either corpus or income. Vehicles such as beneficiary deemed inherited trusts are built on the combination of a beneficiary's right to withdrawal and a limiting Crummey lapse.

Structured properly, a BDOT can preserve several crucial income tax deductions lost or limited due to the 2017 tax reform law. Also, counsel can ensure enhanced asset protection when drafting a BDOT. As with every wealth transfer mechanism, a BDOT carries some risks, particularly around the definition of trust income subject to withdrawal power. Estate planners must understand the potential risks in utilizing a trust under IRC 678.

Listen as our panel provides a practical guide to achieving income tax savings and beneficiary control over trust assets through a BDOT.

Outline

  1. IRC 678 provisions
  2. Structuring beneficiary power to withdraw income to shift taxation to a beneficiary holder
  3. Differentiating between BDOT income withdrawal and beneficiary deemed inheritance trust
  4. Specific benefits and advantages of BDOTs
  5. Drafting considerations and risks to avoid

Benefits

The panel will review these and other relevant topics:

  • How to accurately define "income" for Section 678 purposes to ensure that a beneficiary's power to withdraw income only without invading principal effectively shifts taxation from the trust to the holder of the power
  • Specific tax advantages found in well-structured BDOTs
  • Steps to enhance asset protection within a BDOT structure
  • Using BDOTs in conjunction with other trust vehicles

NASBA Details

Learning Objectives

After completing this course, you will be able to:

  • Recognize how to accurately define "income" for Section 678 purposes
  • Identify specific tax advantages found in well-structured BDOTs
  • Ascertain methods to enhance asset protection within a BDOT structure
  • Understand the tax advantages and disadvantages of using BDOTs in conjunction with other trust vehicles

  • Field of Study: Taxes
  • Level of Knowledge: Intermediate
  • Advance Preparation: None
  • Teaching Method: Seminar/Lecture
  • Delivery Method: Group-Internet (via computer)
  • Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
  • Prerequisite: Three years+ business or public firm experience at mid-level within the organization, preparing complex tax forms and schedules, supervising other preparers/accountants. Specific knowledge and understanding of trust income principles, trust agreements and wills; familiarity with concepts of distributable net income, and capital gains calculations.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).