Beneficiary Deemed Owner Trusts Under IRC 678(a)(1): Using BDOTs for Income Tax Savings and Simplification
Shifting Income Tax To Beneficiaries and Away From Fiduciaries, Preserving Deductions, and Choosing Estate Inclusion
A live 90-minute CLE/CPE video webinar with interactive Q&A
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.
Outline
- IRC 678 provisions
- Structuring beneficiary power to withdraw income to shift taxation to a beneficiary holder
- Differentiating between BDOT income withdrawal and beneficiary deemed inheritance trust
- Specific benefits and advantages of BDOTs
- 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
Faculty
Keith K. Grissom
Partner
Armstrong Teasdale
Mr. Grissom focuses his practice on tax and estate planning, closely held business succession planning and asset... | Read More
Mr. Grissom focuses his practice on tax and estate planning, closely held business succession planning and asset protection. He counsels both businesses and individuals on tax matters including addressing income, estate, gift and generation-skipping transfer tax issues related to estate planning and trust administration. Mr. Grissom frequently works with business owners as well as with multi-generational families on preserving their wealth and the transition of businesses to the next generation. He is also experienced in business entity formation, mergers and acquisitions, and real estate and other tax issues, including tax structuring and controversies. In addition to probate and trust administration, Mr. Grissom advises clients on the formation and funding of private foundations and other tax-exempt entities. He also provides counsel regarding international planning.
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Edwin P. Morrow, III, J.D., LL.M. (Tax), MBA, CFP, CM&AA
Co-Chair, Estate Planning Group
Kelleher + Holland
Mr. Morrow is currently the Co-Chair of the Estate Planning Group of Kelleher + Holland, LLC, based in North... | Read More
Mr. Morrow is currently the Co-Chair of the Estate Planning Group of Kelleher + Holland, LLC, based in North Barrington, Illinois, concentrating on tax, asset protection, business succession and estate planning. Previously, he was a Wealth Strategist for Huntington and US Bank’s private banking advisory groups. Other experience includes research and writing of legal memoranda for the U.S. District Court of Portland, Oregon as a law clerk. He has a Master’s Degree in Tax Law (LL.M.) and Business Administration (MBA) and is a co-author of the Tools and Techniques of Estate Planning, a 1000 page resource guide on technical estate planning topics.
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Cannot Attend May 13?
You may pre-order a recording to listen at your convenience. Recordings are available 48 hours after the webinar. CPE credit is not available on recordings. Strafford will process CLE credit for one person on each recording. All formats include course handouts.