678 Trusts (also called Beneficiary Defective Irrevocable Trust)

Typically, when a client is considering options to help reduce estate taxes, the client must consider techniques that require the client to part with assets he or she has accumulated over the years. For example, many estate planning techniques involve gifting and/or selling the client’s assets to trusts that benefit the client’s children. As a result, the client permanently parts with the assets, as well as all of the future appreciation and the income stream from the assets. However, use of a “678 Trust” (sometimes also called a Beneficiary Defective Irrevocable Trust or “BDIT”) allows the client to combine asset protection, estate tax savings associated with “estate freeze” techniques, and the continued ability to benefit from assets he or she has accumulated over the years.

Paper: 678 Trusts – Planning Strategies and Pitfalls (2024)

Paper: Squeeze, Freeze, and Burn with 678 Trusts (2024)

Slide Deck: Squeeze, Freeze, & Burn – Estate Planning with 678 Trusts (2018)