Drafting Estate Defective Trusts: Income Reallocation, Basis Step-Up, Appreciation, Gift and State Death Tax Issues

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

Conducted on Tuesday, August 12, 2014

Recorded event now available

Program Materials

This CLE webinar will educate estate planning counsel and tax advisors on the utilization of estate defective trusts (EDTs) in a new, income tax planning focused environment. Our panel will discuss drafting provisions to maximize tax benefits, among others.


Since Congress passed ATRA, there has been a shift in the focus of estate planning. Given the increase in the exclusion amount, the number of taxpayers potentially subject to the federal transfer tax has decreased. However, the number of taxpayers concerned with income tax liability has increased.  

Estate planning counsel and tax advisors should be prepared with tools to address these particular concerns of clients, including EDTs, which offer a number of benefits. The main benefits involve the use of income reallocation for tax purposes and the use of EDTs with appreciated assets for basis optimization.

EDTs are highly complex tools and must be structured with care. Counsel and tax advisors must meticulously balance its income tax planning benefits along with the potential for unexpected growth in the client’s estate, and handle avoidance of gift tax consequences and valuation issues.

Listen as our distinguished panel reviews drafting techniques for an effective EDT for purposes of income taxation, optimization of basis, future appreciation and other non-tax opportunities. Finally, our panelists will review techniques for avoiding inherent pitfalls to include unexpected growth, asset valuation, state death taxes and more.



  1. Income tax planning
    1. Income reallocation
    2. Basis optimization
  2. Future appreciation
  3. Non-tax planning
    1. Grantor-retained power
    2. Secrecy
  4. Pitfalls to avoid
    1. Unexpected growth of the estate
    2. Gift tax consequences
    3. Asset valuation
    4. State death taxes


The panel will review these and other key questions:

  • What drafting techniques should be implemented to maximize income tax basis?
  • How can clients benefit from income reallocation through the use of EDTs?
  • How can EDTs be useful for allowing the growth of assets after its creation while preserving the step-up in basis?
  • What considerations must be made to avoid gift tax consequences?
  • How best should counsel handle the continual concern with the state death tax?


Alvin J. Golden
Alvin J. Golden

Ikard Golden Jones

Mr. Golden focuses his practice entirely on estate planning, probate and trust administration. He is a frequent CLE...  |  Read More

Edwin P. Morrow, III, Esq.
Edwin P. Morrow, III, Esq.
Director, Wealth Transfer Planning and Tax Strategies
Key Private Bank Family Wealth Advisory Services

Mr. Morrow advises high net worth private banking clients on tax, trust and estate planning matters. He previously...  |  Read More

Access Anytime, Anywhere

Strafford will process CLE credit for one person on each recording. CPE credit is not available on recordings. All formats include program handouts.

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