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
Note: CPE credit is not offered on this program
Recording of a 90-minute CLE webinar with Q&A
This webinar 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 discuss 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 that are not present in other trust structures
- Steps to enhance asset protection within a BDOT structure
- Using BDOTs in conjunction with other trust vehicles
Faculty

Edwin P. Morrow, III, J.D., LL.M. (Tax), MBA, CFP, CM&AA
Regional Wealth Strategist
U.S. Bank Private Wealth Management
Mr. Morrow is currently a regional wealth strategist for U.S. Bank Private Wealth Management based in Cincinnati, Ohio... | Read More
Mr. Morrow is currently a regional wealth strategist for U.S. Bank Private Wealth Management based in Cincinnati, Ohio and advises high net worth clients on tax, trust and estate planning matters in conjunction with local financial advisory teams and other tax and legal counsel. He previously maintained a private law practice in Cincinnati and Springboro, Ohio, concentrating in taxation, probate, estate and business planning. He is a Fellow of the American College of Trust and Estate Counsel (ACTEC) and is a board certified specialist in estate planning, probate and trust law through the Ohio State Bar Association. He also holds the certified financial planner (CFP®) and certified merger and acquisition advisor (CM&AA®) certifications. Mr. Morrow frequently contributes his expertise to lectures and publications analyzing estate planning issues.
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