DEMISTIFYING TRUST

In light of the passage of the Big Beautiful Bill Act understanding what trusts to use in doing your estate planning just became more important than ever. Should I use two revocable trusts for husband and wife or just one joint revocable trust. Learn how the joint revocable trust can be far superior when dealing with the more moderate estate. Should I consider gifting assets to an intentionally defective grantor irrevocable gifting trust or be more concerned about keeping the assets in light of the increased exemption and focus on the step up in cost basis?  Since the exemptions appear to be staying high at least for the time being, am I less worried about federal estate taxes but more concerned about utilizing an irrevocable grantor income only trust and protecting assets from the nursing home while reducing MA estate tax at the same time? Finally, how do these trusts operate from an income tax perspective on an annual basis. Are they Grantor trusts and if so, how do the grantor trust rules operate, are there gift tax concerns, and how do the marital share, QTIP shares and by pass shares operate in these trusts to shelter the assts from estate taxes? We will also explore the language used in drafting these shares in both revocable and Medicaid irrevocable trusts. Finally, we will run thru the income tax returns for these various trusts and how they are done before the donor dies to how they change after the death of the donor.  Join us for a walk thru of all the code sections associated with these issues, how to draft the trusts, how they operate on a daily basis, the income tax returns associated with them and learn how best to advise your client in this new estate tax environment.

Topics for discussion:

o Understanding the different types of trusts

• • Revocable for husband and wife. Joint Revocable trusts for a married couple
  • Irrevocable Gifting type trusts, spousal lifetime access trusts, life insurance trusts first and second to die variety
  • Irrevocable Medicaid income only trusts for nursing home protection
  • Special needs trusts
  • Pooled trusts yes they are legislatively returned to existence

o How are the trusts different and how does that affect tax reporting?

• • Understanding if the transfers to the trusts are completed gifts or incomplete gifts and the need for a 706
  • Understanding the Grantor trust rules for each type of trust including which ones are most suited for each trust
  • Understanding the Section 1014 and the step up in basis rules and its importance
  • Understanding the limited powers of appointment and their importance verses a general power of appointment and which trust to use them in
  • Understanding the QTIP rules and how the marital share and the bypass share work to shelter estate taxes in both revocable trusts and Medicaid irrevocable trusts

o What triggers the need for tax reporting?

• • Income tax returns 1041s
  • Simple trust vs complex vs grantor trusts
  • Understanding the income distribution deduction

o Are there claw back periods to be aware of?

o Liability protection for the trustees and beneficiaries

• Protection for future divorces
• Generation skipping tax benefits of Dynasty type trusts

Registration Form: 2026 Spring CPE Registration Form