Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

Tuesday, March 25, 2014

CLE on Tricks and Traps for Trusts Owning Stock in S Corporations

CLEThe American Bar Association Section of Real Property, Trust and Estate Law is sponsoring a CLE entitled, Tricks and Traps for Trusts Owning Stock in S Corporations, on April 1, 2014.  Provided below is a description of the event:

The intersection of subchapter S, the grantor trust rules, and the new net investment income tax have changed the landscape of wealth transfer planning with S corporation stock. There are new opportunities for creative planning, but also new pitfalls for planners and clients alike. To complicate matters, changing circumstances over time possibly - even year to year - will impact trust taxation and may require affirmative action.

Trusts that hold stock of S corporations must meet specific requirements prescribed in the Code. The tax impact of these trusts will vary, depending on the identity of the grantor, the trustee, and the beneficiaries, as well as the provisions of the trust and the activities of the relevant players. Understanding both the income and estate tax requirements and limitations is key in properly advising clients.

This program will be a crash course on planning with S corporation stock, including:

  • Types of trusts that can hold stock of S corporations: more than just ESBTs and QSSTs;
  • When and how you can, should, or must switch from one type of trust to another;
  • Trusts, material participation, and the 3.8% tax on net investment income: Can it be avoided? Are there times when it is unavoidable?
  • The true tax effect: ordinary income, net investment income, and estate taxes;
  • Creative planning techniques for the stock of S corporations;
  • Special planning opportunities with QSSTs as beneficiary grantor trusts; and
  • Drafting for future flexibility.


Conferences & CLE, Income Tax, Non-Probate Assets | Permalink

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