Tax Considerations in Trust Terminations, Modifications, and Decanting: Federal and State Taxes, Planning Strategies
Course Details
- smart_display Format
On-Demand
- signal_cellular_alt Difficulty Level
- work Practice Area
Estate Planning
- event Date
Tuesday, November 2, 2021
- schedule Time
1:00 p.m. ET./10:00 a.m. PT
- timer Program Length
90 minutes
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
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This CLE webinar will provide estate planning counsel with an in-depth analysis of the tax implications for trust terminations, modifications, and decanting. The panel will describe the various trust modification methods, address federal and state law issues, and offer planning strategies under current tax law for trusts.
With more than 30 years of experience, Mr. Lipoff specializes in the delivery of domestic and international private client services to enable high-net-worth individuals and families to maximize their new or generational wealth. He provides strategic advice to his clients and their closely held businesses in the areas of income tax planning and compliance, estate planning and administration services, as well as family structure consulting. Through many years in practice, he synthesized the work of various related professionals, and their firms integrate several planning strategies into solutions that maximize value. Mr. Lipoff is a frequent lecturer and author of articles published through professional forums on topics including domestic and international - estate planning and fiduciary income taxation including constructive attribution rules for foreign trusts, Forms 3520 & 3520-A, Graegin Loans, business succession, generation-skipping transfers, Chapter 14 and carried interest estate planning for private investment fund principals, preferred freeze partnerships, and private placement life insurance.
Mr. Raatz practices primarily in the areas of estate planning, probate and trust administration, divorce tax and asset planning, and entity structuring, and taxation. He has significant experience representing thousands of business clients and their families in connection with estate and tax planning. Mr. Raatz is a national author and speaker at numerous seminars on areas of income, estate and gift taxation, probate and trust issues, and selection of business entities. He is a licensed attorney in Arizona. Mr. Raatz practiced as a Certified Public Accountant with KPMG Peat Marwick, CPAs.
Trusts and estates counsel often encounter circumstances where a previously drafted irrevocable trust is defective in some key aspect and requires modification. This defect may be due to a change in circumstances, an error in drafting, or a reaction to legislative changes impacting the tax treatment of trust income.
There are several ways to fix an irrevocable trust. Decanting is only one option among many that may be used to correct a trust. Estate planning counsel must recognize which techniques may apply to a particular set of facts and then implement those techniques.
Several states have seen significant developments in the law governing irrevocable trusts. Counsel must analyze the applicability of state law and consider changing a trust's situs to a jurisdiction with more advantageous laws. In addition, estate planners must recognize the income, gift, and estate tax ramifications of modifying or terminating a trust.
Listen as our experienced panel reviews the key tools available to modify a trust and prepares estate planning counsel for determining state law applicability, notice and consent requirements, and tax considerations.
- Modification methods
- Judicial and non-judicial reformation
- Division
- Amendment
- Decanting
- Other options
- Identifying governing law
- Tax issues
The panel will review these and other key issues:
- What methods are available to modify an irrevocable trust?
- How will the governing state law apply to the validity, construction, or administration of the trust?
- Who must be notified and give consent before a trust can be modified?
- What are the tax implications of decanting, terminating, or modifying a trust?
- What income, gift, and estate tax issues should counsel consider when modifying an irrevocable trust?
- What is the impact of the generation-skipping transfer rules when modifying an irrevocable trust?
