Converting to Nongrantor Trusts to Minimize Income Tax: Maximizing Increased Exemption Benefits

Switching Off Grantor Trust Features in Existing Trusts, Structuring Multiple Trusts to Preserve Deductions

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

Conducted on Wednesday, August 8, 2018

Recorded event now available

or call 1-800-926-7926
Program Materials

This CLE/CPE webinar will provide estate planning counsel and advisers with a thorough and practical guide to using nongrantor trusts to minimize income tax on trust assets. The panel will focus on the new tax regime where income tax planning is often more important than estate tax planning, detailing the difference in tax treatment under the new tax reform law, and will discuss converting existing grantor trusts to nongrantor trusts. The webinar will outline jurisdictional considerations in turning off grantor trust features and offer specific tools to maximize the income tax benefits of nongrantor trusts under the new wealth transfer tax regime.


The new tax law provisions increase the estate tax exemption, reducing or eliminating certain deductions accelerates the need for estate planners to revisit existing wealth transfer structures. Individuals using grantor trusts to minimize estate tax exposure may be better served transferring assets to nongrantor trusts to minimize income tax. This planning can also create additional income tax deductions under the new pass-thru business rules.

The estate tax exemption amount of $22.36 million for married couples eliminates estate tax concerns for even higher net worth taxpayers, at least until the exemption sunsets. However, lost deductions will hit many taxpayers much harder, increasing the federal and state income tax burden on many income-generating assets. Grantor trusts, long the preferred vehicle for settlors looking to minimize or defer wealth transfer taxes, will be less impactful.

Planners should consider restructuring existing grantor trust vehicles to convert trusts holding assets such as real estate to nongrantor trusts. Additionally, certain spousal trusts may benefit from conversion to nongrantor trust status through the inclusion of an “adverse party” with right of approval over spousal distributions.

Listen as our experienced panel provides a practical guide to migrating assets from grantor trusts to nongrantor trusts to minimize income tax on trust assets and use up the temporarily increased estate exemption amounts.



  1. Tax impact of new tax law on current grantor trust structures
  2. Switching off grantor trust features in current trusts
  3. Converting spousal trusts to nongrantor status through use of adverse parties
  4. Incomplete gift nongrantor trusts


The panel will review these and other relevant topics:

  • Using incomplete gift nongrantor trusts (INGs) to minimize state income tax
  • Switching off grantor trust status of existing trusts
  • Using “adverse parties” to provide nongrantor trust status to spousal trusts
  • State income tax treatment of nongrantor trusts
  • Tax impact of complete gift trusts vs. incomplete gift trusts
  • How to increase the §199A Deduction
  • Potential benefits under IRC §1202
  • How to increase the SALT Deduction by $10,000 per trust


Keebler, Robert
Robert S. Keebler

Keebler & Associates

As a CPA and tax advisor, Mr. Keebler’s practice includes family wealth transfer and preservation planning,...  |  Read More

Oshins, Steven
Steven J. Oshins

Oshins & Associates

Mr. Oshins' practice focuses on estate planning and asset protection. He was named Las Vegas Trusts and Estates...  |  Read More

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