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When a Beneficiary Income Accumulation Trust (BIAT) ® is Superior to a Discretionary or Ascertainable Standard Trust for Asset Protection

Third party created irrevocable trusts are not all created equal in protecting from creditors of a beneficiary.  Distribution standards matter.  Taxation matters.  Most consider a completely discretionary trust to be the gold standard, superior to those with ascertainable standards or other forced distributions.  But after a grantor dies, these designs either trap income in trust and force the trust to pay tax at highly compressed rates, or force distributions out of the trust.  A beneficiary income accumulation trust (BIAT®), sometimes referred to generically as a beneficiary deemed owner trust (BDOT), allows the trust to grow tax-free by shifting the income tax burden to the beneficiary without having to take funds out of the protective wrapper of the trust, which greatly enhances the “tax burn” for GST exempt trusts and the overall asset protection for the beneficiary in the long-term, especially when designed with appropriately crafted trust protector, cessor and forfeiture clauses. Originally presented as part of Advanced Asset Protection Planning.
Credits: 1 General, 0 Diversity/Inclusion PR, 0 MH/SA PR, 0 Other PR
SKU: P2403-24R-03
$60.00 or 1.00 credits
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Expires 9/1/2026

Andrew J. Kelleher, Jr., Kelleher + Holland, LLC, North Barrington 
Edwin P. Morrow, Kelleher + Holland, LLC, North Barrington 

Expires 9/1/2026

Andrew J. Kelleher, Jr., Kelleher + Holland, LLC, North Barrington 
Edwin P. Morrow, Kelleher + Holland, LLC, North Barrington 

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The Top Ten Drafting Considerations for Trusts

P2403-24R-02
The do’s and don’ts of trust drafting . . . including uses of powers of appointment, spendthrift clauses, and jurisdictional provisions . . . with forms. Originally presented as part of Advanced Asset Protection Planning.
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