Springing the Delaware Tax Trap: Drafting Limited Powers of Appointment to Increase Asset Income Tax Basis
Recording of a 90-minute CLE/CPE webinar with Q&A
This course will provide estate planners and advisers with a thorough and practical guide to utilizing the Delaware Tax Trap technique to increase asset basis and minimize income tax. The panel will offer guidance on drafting the powers of appointment needed to construct the trap, and discuss circumstances under which an inter vivos exercise of the appointment powers would yield a more favorable result. The speakers will also detail state law provisions covering perpetuities that planners and counsel need to be aware of in making sure that the trap is properly “sprung.”
Outline
- Using a Delaware Tax Trap powers of appointment designation to optimize basis
- State considerations—making sure the appointment powers will trigger a new perpetuities period
- Drafting suggestions
- When to exercise the limited power of appointment to "spring the trap"
- Illustrations of basis step-ups—the Trap in action
Benefits
The panel will discuss these and other important issues:
- Drafting limited powers of appointment provisions to set the trap
- Making sure the trap springs on the appointee rather than the settlor
- How to make sure that exercise of the limited power of appointment conforms to the state and local perpetuities provisions so that the exercise starts a new perpetuities period
- Use of an inter vivos power of appointment to set the trap
Faculty
Steven T. O'Hara
Shareholder
Bankston Gronning O'Hara
Mr. O'Hara's practice focuses on estate planning, business planning, estate and trust administration, and... | Read More
Mr. O'Hara's practice focuses on estate planning, business planning, estate and trust administration, and tax planning and reporting. He is the author of many articles spanning over three decades including Working In A World With The GST Tax, 137 Trusts & Estates 47 (1998) and Thinking Outside the Code, 116 (No. 8) Tax Notes 679 (August 20, 2007).
CloseJeffrey C. Wolken
Administrative Vice President
Wilmington Trust Company
Mr. Wolken is responsible for developing trust planning strategies for wealthy individuals and families throughout the... | Read More
Mr. Wolken is responsible for developing trust planning strategies for wealthy individuals and families throughout the United States and abroad. He works closely with his clients’ legal, tax, and investment advisors to construct and implement appropriate trust structures that take advantage of the state of Delaware’s unique trust and tax laws. Prior to joining Wilmington Trust, he was in private legal practice as a member of the Estates and Trusts Practice Group of Montgomery, McCracken, Walker & Rhoads, LLP.
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