Trust Powers to the RescueTrust Powers to the Rescue

Exercising common trust powers may help minimize income taxes, revise outdated planning, manage trust assets on a more tax-efficient basis or capture unused transfer tax exemptions. These ordinary heroes include: (1) grantor swap power, (2) appointment of spousal lifetime access trust (SLAT) assets to grantor-spouse, (3) allocation and use of unused generation-skipping transfer (GST) tax exemptions, (4) the 65-day rule for distributions, and (5) honorable mentions such as springing the Delaware tax trap, advance distributions, lending to beneficiaries and granting general powers of appointment (POAs). Let’s explore opportunities when exercising such powers and how to take advantage of each. 

Grantor Swap Power

One of the most ubiquitous po...