INGs and Spousal Lifetime Access Non-Grantor Trusts (SLANTs) – Not Just for State Income Tax Avoidance: How Tax Reform Makes “INGs” and “SLANTs” Even More Powerful
Recording and Slides are Available Here .
INGs and Spousal Lifetime Access Non-Grantor Trusts – Not Just for State Income Tax Avoidance: How “INGs” and “SLANTs” Can Save State Income Taxes and Why Tax Reform Makes Them Even More Powerful
Incomplete Gift, Non-Grantor Trusts (“INGs”) have been steadily increasing in use. The reduction in deduction for state income taxes and continuingly favorable court decisions will only make them more so. Additionally, the doubling of the estate/gift/GST exemption and the new tax reform scheme vis a vis deductions for state income tax, de facto elimination of the charitable deduction for many and the new 20% deduction for qualified business income may also cause an increase in the use of completed gift non-grantor trusts (when’s the last time you considered one of those!).
While INGs and SLANTs sound simple on the surface, like most estate and tax planning techniques the “devil is in the details” and they have deeper, more complex issues that need to be addressed if they are to be utilized properly. In this webinar, Ed will cover:
- The unique ING trust structure approved in the key PLRs, including the most recent favorable rulings involving the preservation of community property.
- Which states are best for using INGs to avoid state income tax.
- Which states are best for using SLANTs to avoid state income tax (they may be different!).
- Overlooked design options to legitimately avoid some state trust residency rules (along with an examination of several recent state and U.S. Supreme Court decisions on the constitutional limits of these residency rules)
- How some states’ “source income” rules apply, regardless of a taxpayer’s residency and how to avoid state income tax for most clients’ most likely largest taxable event – the sale of a closely held business or pass through entities holding real estate and business interests (material includes a 50 state chart which not only includes the simpler trust residency rules, but also the more varied and complex source income rules applicable to sales of intangibles and entities).
- The overlooked federal income tax benefits possible with such trusts, such as avoiding the 3.8% surtax applicable to passive business owner income, as well as income tax shifting, exploitation of more favorable charitable deductions, the new Section 199A qualified business income deduction
- Where’s the comfort level of “relying” on PLRs – what part of INGs is clearly supported in the tax code, regulations or other substantial authority - and what is not?
- Why New York’s legislative response to INGs will NOT become widely adopted by other states (and, how to exploit the loopholes left open using SLANTs)
- Common administration traps that might trip up non-grantor trust status
- How to exploit regulations to trap capital gains inside the trust for tax purposes, even if they are distributed (and how ESBTs can trap non-capital gains income in trust even if income is distributed)
- Traps and opportunities with loans, investments and purchases to and from DINGs and NINGs
- Why politicians love INGs and how they can use them to exploit a little known new tax code section buried deep within the PATH Act!
- How to defer gains via installment sales to INGs at least two years prior to sale of a business.
- How using INGs in conjunction with charitable remainder unitrusts (CRUTs) will often be much, much more tax efficient than ordinary CRUTs (and why you need to know how to avoid the unrelated business income tax or “UBIT” rules)
There will be no CE for this webinar
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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.