Upstream Income Tax Planning – Income Tax Basis Planning to Achieve Step Up in Basis at Either Spouse’s First Death (Even in Non-Community Property States) and Exploit Older Relatives/Beneficiaries’ $11+ Million Exclusion and/or Lower Income Tax Brackets

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Upstream Income Tax Planning – Income Tax Basis Planning to Achieve Step Up in Basis at Either Spouse’s First Death (Even in Non-Community Property States) and Exploit Older Relatives/Beneficiaries’ $11+ Million Exclusion and/or Lower Income Tax Brackets
Join Ed Morrow in his "must see" LISI webinar where he will review that following topics:
  • What are the pros and cons of granting presently exercisable or testamentary General Power of Appointment to revocable trusts (also known as Joint Exempt Step-Up Trusts or “JESTs”) to get a basis step up for either spouse’s assets at first death? How does IRC §1014(e) work for any upstream gifting and estate inclusion?
  • What are the pros and cons of spousal “Estate Trusts” to do the same?
  • How viable are AK/SD/TN Community Property Trusts?
  • You will learn to contrast these vs. safer irrevocable trust alternatives that have greater upside potential. 
  • Why the Irrevocable “Upstream” Optimal Basis Increase Trust is the natural successor to basic Spousal Lifetime Access Trust (“SLAT”) planning.
  • What’s different in granting an older relative a general testamentary power of appointment with granting downstream beneficiaries a general testamentary power of appointment?
  • How may you use testamentary limited powers of appointment to achieve the same result by triggering the Delaware Tax Trap? Are there benefits to using another state’s laws, such as Arizona or Delaware, in this area? Do DAPTs have a role in basis planning?
  • How do you work in leverage to turn a step up for $10 million of assets at a beneficiary’s death into a step up of $100 million or more? We’ll go through the §2053 regulations so you know the requirements, pitfalls and unanswered questions of getting basis for debt upon a powerholder’s death.
  • What is the differentiation between an Upstream OBIT and standard Irrevocable Grantor Trust planning? How does it contrast with a BDIT (beneficiary defective inheritor’s trust)?
  • How do we ensure continued asset protection for the settlor’s families? Who is the grantor for income, estate, gift and state creditor protection law purposes upon the lapse or exercise of different powers of appointment and why it matters.
  • How to safeguard upstream planning trusts against beneficiary estate insolvency or Medicaid payback in states like California that have passed creditor-friendly law surrounding powers of appointment.  We’ll include a 50-state chart on creditor protection law surrounding such powers.
  • How to effectively exploit the generation skipping transfer tax exemption in conjunction with any upstream planning.
  • What is the Uniform Power of Appointment Act making its way through the states and how would it change common law to be more creditor friendly and attack creative planning with general powers of appointment? How to overcome these issues through drafting if your state passes it without fixing its various flaws.
  • How can you convert existing B Trusts, SLATs and other Irrevocable Trusts to an “Upstream OBIT”?
  • Pros and cons of using trustee/trust protector powers vs. decanting vs. non-judicial settlement agreement and court reformations.

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Edwin Morrow, J.D., LL.M., MBA, CFP®, CM&AA® is a Regional Wealth Strategist based in Cincinnati, Ohio for U.S. Bank Private Wealth Management, where he concentrates on thought leadership and planning ideas for high net worth clientele in tax, asset protection and estate planning areas. Ed was previously a Director in Key Private Bank's Family Wealth Advisory Group and prior to that in private law practice working in taxation, probate, estate and business planning. Other experience includes research and writing of legal memoranda for the U.S. District Court of Portland, Oregon as a law clerk.


Ed is a Fellow of the American College of Trust and Estate Counsel (ACTEC) and a Board Certified Specialist (through the Ohio State Bar Association) in Estate Planning, Trust and Probate Law. He is a Certified Financial Planner (CFP®) professional and a Certified Merger & Acquisition Advisor (CM&AA®). He is also a Non-Public Arbitrator for the Financial Industry Regulatory Authority (FINRA).



Ed is a frequent speaker at CLE/CPE courses on asset protection, tax and financial and estate planning topics, and recently co-authored, with Stephan Leimberg, Paul Hood, Martin Shenkman and Jay Katz, the 18th Edition of The Tools and Techniques of Estate Planning, a 997-page practice-based resource on estate planning.


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