TCJA Supercharges ‘Upstream’ Estate Tax Planning Techniques

Overview


 

Carlyn McCaffrey explained how the new tax law facilitates “upstream” estate tax planning where donor assets meant for a child or grandchild are put into a trust for a parent who has a general power of appointment over the trust and whose estate canabsorb the value of the assets without tax issues. “The bonus is, this is a trust I was going to create anyway,” Ms. McCaffrey concluded, “and now by giving my [parent] this general power, I’m going to get a basis step-up for all the assets I’ve put in the trust.”