Structuring Sprinkle Trusts to Minimize Income Tax Consequences to Trust and Beneficiaries
Discretionary Distribution Strategies to Reduce Income Tax and Avoid Challenges to Trustee Sprinkle Power
Recording of a 90-minute CLE/CPE webinar with Q&A
This CLE/CPE course will provide estate planning counsel with guidance for designing income tax minimization strategies using sprinkle/spray trusts and other distribution mechanisms to shift tax burdens from higher to lower taxed beneficiaries. The panel will go beyond the basics to demonstrate structuring sprinkle provisions in discretionary trusts to allow trustees power to decide how trust assets will be distributed. The panel will discuss drafting considerations to substantiate grantor intent while protecting trustees from beneficiary challenges or income tax consequences arising from the exercise of fiduciary discretion.
- Types of sprinkle trusts
- HEMS standard (health, education, maintenance and support)
- Key language that a sprinkle provision should contain
- Using sprinkle trusts as an income tax minimization strategy
- Risks to trustees in exercising sprinkle powers
The panel will review these and other key issues:
- What types of trust assets would see the most benefit from being subject to discretionary sprinkle distribution provisions?
- The limits of HEMS standards in granting trustee discretion in a sprinkle trust
- Evaluating beneficiaries’ tax situations and marginal rates in making distribution determinations
- Risks to fiduciaries in exercising discretion to make distributions under a sprinkle trust
Elise Gross, Esq., LL.M.
Presser Law Firm
Ms. Gross represents individuals and businesses in connection with the establishment of comprehensive asset protection... | Read More
Ms. Gross represents individuals and businesses in connection with the establishment of comprehensive asset protection plans that incorporate both domestic and international components. She recently served on the committee that drafted the current amendments to the Nevis Trusts and limited liability company laws. In addition to asset protection, she has focused her practice on estate planning for over twenty years, including the drafting and administration of wills and trusts as well as probate.Close
Arlene A. Newton
Skadden Arps Slate Meagher & Flom
Ms. Osterhoudt focuses her practice on estate and gift tax planning and the administration of complex trusts and... | Read More
Ms. Osterhoudt focuses her practice on estate and gift tax planning and the administration of complex trusts and estates. She assists high-net-worth clients with implementing their estate planning objectives, including the preparation of wills, trust agreements and related instruments. She also works on wealth transfer planning strategies, advising clients on the benefits of grantor retained annuity trusts, sales to grantor trusts, qualified personal residence trusts, family limited partnerships and limited liability companies, life insurance trusts and dynasty trusts. In addition, she has worked with nonresident aliens regarding planning for property in the United States and other cross-border planning opportunities.Close