Estate Planning for Income Tax Reduction: Strategies for Maximizing New Basis

Leveraging Estate Tax Inclusion, Partnerships, Trusts, and Powers of Appointment

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

Conducted on Wednesday, August 24, 2016

Recorded event now available

or call 1-800-926-7926

This CLE/CPE course will prepare estate planning counsel and tax advisors to unravel, understand and utilize stepped-up basis for income tax purposes. The panel will outline specific techniques for estate tax planning to leverage the advantages of a new basis at death, which often is a step-up in basis.


As a result of the permanent indexed estate tax applicable exclusion amount, most estates will have no federal estate tax concerns. In addition, income tax rates applicable to trusts have increased and hit the highest marginal rate at a relatively low level of income. Accordingly, advisors should now focus more on the ongoing income tax effects of trusts and maximizing the new basis at the owner’s as well as the surviving spouse’s death.

Attendees will learn specific strategies to maximize flexibility of bypass and QTIP trusts for optimal income tax results. Many of these strategies can also be incorporated in “upstream” and “downstream” planning.

Estate planning counsel and tax advisors must be able to integrate techniques that avoid estate inclusion for taxable estates, yet cause estate inclusion and avoid discounting for non-taxable estates. Furthermore, tax advisors need to learn how to avoid the “capital gains tax trap” endemic to most trusts, and how to efficiently enable income tax shifting among beneficiaries and appointees. New and innovative uses of QTIPs and formula powers of appointment can achieve superior income tax results without sacrificing estate and asset protection benefits.

Listen as our experienced panel discusses the specific techniques used to preserve a step-up in basis at the death of both the owner and surviving spouse. Learn how to increase income tax savings for your clients given the current reprieve on the estate tax.



  1. Strategies for intentional inclusion of assets in estate
  2. Optimal Basis Increase Trusts
  3. Risks and Opportunities in GPOAs
  4. Other techniques to lower Trust Income Tax


The panel will review these and other key issues:

  • When the intentional inclusion of assets in the estate tax is appropriate
  • Assets that benefit the most from basis increase, and how to address this in powers of appointment
  • Amending or administering LLC/partnerships to achieve the maximum “step up” in basis
  • Anticipating hidden dangers of “all to QTIP”/portability estate plans
  • Practical solutions to hidden problems of typical disclaimer-based plans
  • Optimal basis increase trusts—using formula testamentary GPOAs and LPOAs and the Delaware Tax Trap
  • Comparing QTIP vs. use of formula general powers of appointment vs. using the Delaware Tax Trap
  • State laws that many bar committees are working to change (or should be) to enable improved trust tax options
  • Trust protector provisions to Add GPOAs—dangerous or not?
  • Opportunities for applying or adding OBIT techniques to preexisting irrevocable trusts
  • Techniques other than basis to lower ongoing trust income tax
  • Comparing 678(a) “beneficiary-defective” provisions vs. appointing/distributing income via K-1 per 643 regs
  • How/When ongoing income tax provisions and burdens might be changed (and when not)
  • Income tax shifting with powers of appointment (including to charity)


Hood, Paul
L. Paul Hood, Jr., JD, LL.M, CFRE, FCEP

Director of Planned Giving
The University of Toledo Foundation

Mr. Hood is a former estate planning and tax attorney in Louisiana. He frequently speaks and writes on estate planning,...  |  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

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

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