Trusts Holding S Corporation and Partnership Interests: Legal and Tax Considerations

This CLE/CPE webinar will provide estate planners and tax professionals guidance on navigating the legal and tax implications of trusts holding interest in pass-through entities. The panelist will discuss planning for trusts holding S corp stock and other pass-through entities, basis step-up in a partnership's assets, avoiding issues regarding beneficiaries of business interests, planning for the 3.8% net investment income tax, and other key issues.

Using trusts to hold interests in partnerships and S corporations provides significant tax advantages under current tax law. However, structuring these trusts involves a high level of complexity and requires an in-depth knowledge of applicable federal and state rules that must be considered.

Succession, shareholder agreements, valuation, post-mortem planning, and basis considerations are some of the challenges in developing an estate plan for owners of S corporations and partnerships. Holding S corporations and partnerships in a trust can provide significant tax and estate planning benefits, but structuring them incorrectly may disrupt cash flow and result in unforeseen tax consequences.

For estate planning purposes, trusts and estates counsel must recognize the impact of eligibility rules for S corps and partnerships, key tax provisions, and reporting and administrative challenges to implement methods to minimize tax liability and achieve the goals of an estate plan.

Listen as our panelist provides techniques for drafting various types of trusts, including grantor, testamentary, QSSTs, and ESBTs, and offers methods to overcome common tax and estate planning challenges involving trusts holding S corp and partnership interests.