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Fiduciary Income Tax Counsel, Compliance and Litigation

We understand the tax interplay between estates and beneficiaries and estates and trusts and counsel clients on several ways to save money on fiduciary and individual income taxes.

For example, trusts like individuals pay income taxes, but the income tax brackets are applied to trusts on an accelerated basis. That means trusts pay income taxes at a higher rate on much less income than do individuals.

The disparity can be potentially costly if income is left in a trust that could be distributed to individual who is in a lower tax bracket than the trust. We counsel our clients on how to leverage the income tax rules to turn the disparity into an advantage and reduce taxes.

In the estate planning stage, we apply certain drafting techniques that anticipated the tax issues and address how to distribute trust income in a tax efficient or tax beneficial manner.

During trust administration, we counsel trustees, executors and beneficiaries on timing issues, what to distribute when, and how to make the most tax saving decisions.

We also know when and how to use decanting to change the terms or situs of a trust to improve tax efficiently and provide flexibility for trustees on allocating certain kinds of income in the most tax advantaged ways. As comprehensive as the New York State Principal and Income Act may be, ownership of closely held assets, family businesses, and assets in trust often call for a customized allocation of income and principal accounts.

In sum, proper trust and will drafting and knowing when and how during trust and estate administration to distribute trust and estate income can save you money on taxes.