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2021 GST Tax Planning: Applicable Rules, Allocations, Formula Drafting, Key Challenges, and Mistakes to Avoid

Note: CPE credit is not offered on this program

Recording of a 90-minute CLE video webinar with Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Conducted on Thursday, July 15, 2021

Recorded event now available

or call 1-800-926-7926

This CLE course will provide estate planners guidance on key generation-skipping transfer (GST) tax planning techniques under current tax law and proposed tax law changes. The panel will discuss applicable GST rules and utilizing those rules to the advantage of clients, allocations, formula drafting, and more. The panel will also discuss reporting requirements, computing the GST tax, key challenges, and mistakes to avoid.


A solid foundation in the GST tax regime of Section 2632 and following statutes is critical to successful multi-generational gift tax planning and compliance. Estate planners must grasp skip-person transferees and gifts that will trigger GST tax, the "inclusion ratio" rules to calculate the tax cost of GSTs, and formula drafting.

Estate planners should utilize all available mechanisms, such as gifting, trusts, and other transfer methods. Potential tax law changes abound under the Biden administration. GST tax planning can assist in limiting or avoiding gift and estate taxes. Reducing the estate and gift tax exemption will impact taxpayers wishing to leave substantial amounts to grandchildren or to trusts that will eventually pass to grandchildren.

The amount of the exemption from the federal GST tax is currently equal and tied to the amount of the estate and gift tax exemption. Therefore, any reduction in the estate and gift tax exemption will likewise reduce the GST tax exemption. Section 2642 provides the framework for determining the taxable portion of any GST under GST tax.

Furthermore, there are special rules applied for inclusion ratios and applicable fraction formulas, depending on the type of trust receiving a GST. To avoid costly tax consequences, estate planning counsel and advisers need to be constantly aware of the impact of these rules on transfers subject to the GST rules.

Listen as our experienced panel provides a deep and practical guide to applicable GST rules and methods for utilizing those rules to the advantage of clients, allocations, formula drafting, and more.



  1. IRC 2642 structure
    1. Inclusion ratio defined
    2. Applicable fraction defined
    3. Treatment of inclusion ratios in severance of GST-impacted trust into two or more trusts
    4. Special rules for CLATs and other trusts
  2. Calculation of inclusion ratio
  3. Planning implication of pre-transfer inclusion ratio and fraction calculations
  4. Utilizing GST tax planning in light of potential tax law changes


The panel will review these and other important topics:

  • What are the key planning considerations in light of potential tax law changes?
  • How can GST tax planning assist clients under current tax law and in anticipation of tax law changes?
  • How do you spot trusts with an inclusion ratio greater than zero?
  • What is the interrelation between inclusion ratio and an applicable fraction under Section 2642 and its regulations?
  • What are the special rules for CLATs and other types of trusts in calculating the inclusion ratio and imposition of GST tax?


Mendel, Jennifer
Jennifer A. Mendel

Barnes & Thornburg

Ms. Mendel has spent the last 15 years honing her craft counseling high net worth families on complex trust, estate and...  |  Read More

Rappaport, Matthew
Matthew E. Rappaport, Esq., LL.M.

Vice Managing Partner
Falcon Rappaport & Berkman

Mr. Rappaport counsels clients on technical and complex tax issues. He works closely with closely held business owners,...  |  Read More

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