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Live Webinar

90-minute live streaming program
  • March 24
  • 1:00 - 2:30 pm EST

Intentionally Defective Grantor Trusts

March 24

Learn how to effectively plan with intentionally defective grantor trusts and know the tax issues related to them.

Intentionally, defective grantor trusts are a common topic of discussion among estate planners and are often promoted as an essential estate planning technique. For all their popularity, it can be difficult to understand why and how grantor trusts are created, not to mention why they are considered defective. This material will bring some clarity to the topic of grantor trusts and the reasons they form a foundation of many estate plans. Learn what triggers grantor trust status, why it might be to a client’s advantage to do so, and when and how to avoid grantor trust status. This topic will also offer a brief history of grantor trusts, and an explanation of how the misnomer, defective, came to apply, along with some insight on possible changes to the rules regarding grantor trusts in the future.

Learning Objectives

  • You will be able to define an intentionally defective grantor trust.
  • You will be able to identify the powers and trust attributes that trigger grantor trust status.
  • You will be able to recognize potential triggers to avoid when grantor trust status is not desired
  • You will be able to explain the advantages of grantor trusts and the reasons they are used in planning.

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Over 34 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Agenda

What Is an Intentionally Defective Grantor Trust?
  • Trusts Are Treated as Separate Taxpayers for Income Tax Purposes Under IRC § 641, Grantor Trusts Are an Exception to That Rule
  • The Term Intentionally Defective Is a Misnomer Arising From the Historical Development of the Grantor Trust Rules
  • The Effect of Grantor Trust Status Is to Treat the Grantor as the Owner of the Trust for Income Tax Purposes - What Does That Mean?
How Are Grantor Trusts Used in Estate Planning, and Why Might Someone Intentionally Create a Grantor Trust?
  • Grantor Trusts Allow the Grantor to Shift More Wealth to the Trust, Gift Tax Free
  • A Sale to a Grantor Trust Can Be an Effective Way to Leverage a Relatively Small Gift to Shift Income and Appreciation on an Asset to the Trust
  • Other Advantages Include the Ability to Hold S Corp. Stock in the Trust, and the Ability to Reacquire Low-Basis Assets in Order to Obtain the Step-up in Basis Under IRC § 1014
How Is Grantor Trust Status Triggered?
  • Grantor Trust Rules Are Found in IRC § 671-679 - Note the Spousal Attribution Rule Under IRC § 672(e)
  • The Most Frequently Used Mechanisms for Intentionally Triggering Grantor Trust Status Are Found in IRC § 674 (Power to Control Beneficial Enjoyment) and § 675 (Administrative Powers)
  • Other Powers That Frequently Trigger Grantor Trust Status (Intentionally or Not) Are Found in IRC § 676 (Power to Revoke) and § 677 (Income for Benefit of Grantor – or Spouse)
When Might It Be Better to Create a Non-Grantor Trust and How Do You Avoid Grantor Trust Triggers?
  • In Some Cases, the Grantor Simply May Not Want to Pay the Income Tax on the Trust - Consider a Beneficiary Defective Trust Where Appropriate
  • A Non-Grantor Trust Could Potentially Avoid State Income Tax or Obtain Additional State and Local Tax (SALT) Deduction for Real Property - Popular Techniques for Accomplishing This Are the Incomplete Non-Grantor or ING Trust and the SALTy SLAT
  • Avoiding Grantor Trust Status Can Be Difficult Depending on the Terms of the Trust and the Identity of the Beneficiaries and Trustees; In Some Cases It May Be Necessary to Add Provisions Requiring Consent of an Adverse Party in Order to Avoid Grantor Trust Status
Is a Change in the Grantor Trust Rules on the Horizon?
  • There Have Been Proposals to Include Grantor Trusts in the Grantor's Estate for Transfer Tax Purposes
  • The Likelihood of Such a Change Is Unknown
  • Consider Toggling and Decanting as Possible Ways to Change Grantor Trust Status in the Event the Rules Are Changed With Advance Warning
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Why Lorman?

Over 34 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Credits

Live Webinar Registration

  • CFP 1.5
     
  • The Certified Financial Planner Board of Standards, Inc. has granted 1.5 hours of continuing education credit. Level of Knowledge: Intermediate.
     
  • AK CLE 1.5
     
  • Alaska attorneys may receive 1.5 hours of continuing legal education for completing this program. Please contact the Alaska Bar Association or go to www.alaskabar.org for details regarding reciprocity with other states.
     
  • AL CLE 1.5
     
  • This course or a portion thereof has been approved by the Alabama State Mandatory Continuing Legal Education Commission for a maximum of 1.5 hours credit.
     
  • AR CLE 1.5
     
  • This course has been approved for 1.5 hours of CLE by the Arkansas CLE Board.
     
  • Arizona CLE 1.5
     
  • The State Bar of Arizona does not approve or accredit CLE activities for the Mandatory Continuing Legal Education requirement. This activity may qualify for up to 1.5 hours toward your annual CLE requirement for the State Bar of Arizona.
     
  • CA MCLE 1.5
     
  • Lorman Business Center, LLC. is a State Bar of California approved MCLE sponsor and this course qualifies for 1.5 CLE hours of participatory credit.
     
  • CT CLE 1.5
     
  • Neither the Connecticut Judicial Branch nor the Commission on Minimum Continuing Legal Education approve or accredit CLE providers or activities. This course has been approved for CLE credit in jurisdictions aside from CT and therefore it automatically meets the content and delivery requirements in Connecticut. Credit is based on a 60 minute credit hour and shall be awarded as follows: 1.5 CLE credit(s).
     
  • HI CLE 1.5
     
  • This program was approved by the Hawaii State Board of Continuing Legal Education for 1.5 CLE credit hours.
     
  • IL CLE 1.5
     
  • This course was approved for a total of 1.5 hours of MCLE Credit by the Illinois MCLE Board.
     
  • ME CLE 1.5
     
  • This course has been approved by the State of Maine Board of Overseers of the Bar. Lawyers who complete this course shall receive 1.5 hours of CLE credit under M. Bar R. 12.
     
  • MN CLE 1.5
     
  • This program has been approved by the Minnesota Board of Continuing Legal Education for 1.5 hours of credit.
     
  • MO CLE 1.8
     
  • This program has been approved by the Missouri Bar for 1.8 hours of CLE.
     
  • MS CLE 1.5 (Pending)
     
  • This program has been submitted to the Mississippi Commission on Continuing Legal Education. Approval pending.
     
  • ND CLE 1.5 (Pending)
     
  • This program has been submitted to the North Dakota Commission for Continuing Legal Education. Application pending.
     
  • NH MCLE 1.5
     
  • NH MCLE does not approve or accredit CLE activities for the NH Minimum CLE requirement. Lorman Education Services believes this course meets the requirement of NH Supreme Court Rule 53 and may qualify for CLE credit(s). Program Length: 90 Minutes.
     
  • NJ CLE 1.8
     
  • This program has been approved by the Board on Continuing Legal Education of the Supreme Court of New Jersey for 1.8 hours of total CLE credit.
     
  • NM CLE 1.5
     
  • This program has been approved by the New Mexico Minimum Continuing Legal Education Board for 1.5 hours of credit.
     
  • NV CLE 1.5
     
  • This program has been approved by the Nevada Board of Continuing Legal Education for 1.5 CLE hours.
     
  • NY CLE 1.5 including Areas of Professional Practice 1.5
     
  • This course has been approved in accordance with the requirements of the New York Continuing Legal Education Board for up to a maximum of 1.5 credit hours in the area(s) of Areas of Professional Practice for 1.50 hours. Each hour may be counted only as satisfying one category of credit. Duplicate credit for the same hour of instruction is not permitted. This course qualifies for both established and newly admitted attorneys. Lorman Business Center, LLC. has a financial hardship guideline. Please contact customer service at 1.866.352.9539 for instructions on how to apply.
     
  • PA CLE 1.5
     
  • This Distance Learning program has been approved by the Pennsylvania Continuing Legal Education Board for 1.5 hours of substantive law, practice and procedure CLE credit.
     
  • RI CLE 1.5
     
  • This program has been approved by the Rhode Island Mandatory Continuing Legal Education Commission for 1.5 hours of CLE credit.
     
  • TN CLE 1.5
     
  • This program has been approved as a distance learning format by the Tennessee Commission on Continuing Legal Education for a maximum of 1.5 hours of credit.
     
  • UT CLE 1.5
     
  • This program has been approved by the Utah State Board of Continuing Legal Education for 1.5 CLE hours.
     
  • VA CLE 1.5 (Pending)
     
  • This program has been submitted to the Virginia Mandatory Continuing Legal Education Board for 1.5 CLE credit hours.
     
  • VT CLE 1.5
     
  • This program has been approved by the Mandatory Continuing Legal Education Board of Vermont for 1.5 hours of CLE credit.
     
  • WA CLE 1.5
     
  • This program has been approved by the Washington State Board of Continuing Legal Education for 1.5 hours of Law & Legal Procedure credit.
     
  • WI CLE 1.5
     
  • This program has been approved by the Board of Bar Examiners for 1.5 hours for use toward the Wisconsin Mandatory CLE requirement.
     
  • WV MCLE 1.8
     
  • This program has been approved by the West Virginia State Bar MCLE Commission for 1.8 MCLE hours.
     
  • CPE 1.8 including Specialized Knowledge 1.8
     
  • Lorman Education Services is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its web site: https://www.nasbaregistry.org/cpas/complaints. For more information regarding administrative policies such as complaint and refund, please contact our offices at 866-352-9539. CPE Credit: Maximum Credit Hours: 1.8 each session (based on a 50 minute credit hour). You must attend at least 50 minutes to obtain credit. Field of Study: Specialized Knowledge for 1.8 hours. Prerequisite: . Level of Knowledge: Intermediate. Teaching Method: Seminar/Lecture. Advance Preparation: None. Delivery Method: Group Internet Based. Please refer to the information in this brochure for outline, course content and objectives. Upon completion of this course, you will receive a certificate of attendance. Final approval of a course for CPE credit belongs with each state's regulatory board. Please note: In order to receive CPE credit for this course you MUST use the streaming audio option, as well as enable and complete the required progress checks.
     

Who should attend?

This live webinar is designed for attorneys, estate planners, accountants, CPAs, presidents, vice presidents, tax managers, financial planners, trust administrators and lenders.

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Why Lorman?

Over 34 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Faculty

Jonathan G. Blattmachr

Jonathan G. Blattmachr

InterActive Legal

  • Principal at InterActive Legal
  • More than 45 years of experience in trusts and estates law
  • Former partner in Milbank (formerly, Milbank Tweed Hadley & McCloy) in New York
  • Admitted to the bars in New York, California, and Alaska
  • Wrote or co-wrote nine books and more than 500 articles on estate planning topics
  • Writes and lectures extensively on estate and income tax planning, as well as charitable giving
  • Editor of Wealth Transfer Planning and founder of InterActive Legal - www.interactivelegal.com
Vanessa L. Kanaga, Esq.

Vanessa L. Kanaga, Esq.

InterActive Legal

  • President and Director of Content Development for InterActive Legal
  • Former associate attorney at Milbank (formerly, Milbank Tweed Hadley & McCloy) and Moses & Singer in New York, and Hinkle Law Firm in Wichita, KS
  • Advanced certificate in estate planning, New York University Law School; certificate in business strategy, Cornell University
  • Author of several articles/blogs on estate planning topics
  • Frequent presenter of online webinars and moderator of InterActive Legal's Roundtable webinar series
  • Graduate, Wichita State University and Cornell Law School
  • Can be contacted at [email protected]
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Why Lorman?

Over 34 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

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Product ID: 406747
Published 2021
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