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Estate Planning Masterclass #1: Tax-Smart Strategies for Inheriting or Passing on Large IRAs and Other Major Assets

The first session of the Estate Planning Masterclass focused on one of the most significant planning challenges facing affluent families and their advisors today: how to transfer large IRAs and other appreciated assets efficiently after the SECURE Act while balancing income taxes, estate taxes, creditor protection, family dynamics, and long-term trust administration.

Presented by Alan Gassman, JD, LL.M., and Scott Levine, JD, the session explored both pre-death and post-death planning strategies involving retirement accounts, trusts, charitable planning, beneficiary designations, real estate ownership, and digital assets. A major theme throughout the program was that retirement accounts are no longer “set-it-and-forget-it” assets. Instead, beneficiary designations, trust structures, and distribution strategies must be revisited regularly in light of changing tax law, family circumstances, and planning objectives.

The presenters emphasized that many estate plans drafted prior to the SECURE Act may now contain outdated conduit trust provisions, inflexible payout structures, or unintended tax consequences. They also highlighted the growing importance of accumulation trusts, disclaimer planning, charitable remainder trusts (CRTs), and flexible trustee powers in preserving tax efficiency and family protection over multiple generations.

The session further addressed creditor protection strategies, state-specific property ownership issues, qualified charitable distributions (QCDs), life insurance trust planning, and practical considerations surrounding digital assets and probate avoidance.

The webinar repeatedly stressed that effective estate planning requires coordination among attorneys, CPAs, financial advisors, trustees, insurance professionals, and family members. 

Key Topics and Expanded Insights

SECURE Act Changes and the End of the “Lifetime Stretch IRA”

One of the foundational topics of the session was the dramatic impact of the SECURE Act on inherited retirement account planning.

Prior to the SECURE Act, many non-spouse beneficiaries could “stretch” inherited IRA distributions over their life expectancy, allowing continued tax-deferred growth for decades. The SECURE Act significantly curtailed this strategy for most beneficiaries by imposing a 10-year distribution rule.

Key Takeaways

• Most non-spouse beneficiaries now must fully distribute inherited IRAs within 10 years after the original account owner’s death. 
• Eligible Designated Beneficiaries (EDBs) retain more favorable distribution treatment. These generally include: 
  • Surviving spouses 
  • Minor children of the account owner (until majority) 
  • Disabled individuals 
  • Chronically ill individuals 
  • Beneficiaries not more than 10 years younger than the decedent 
• If no designated beneficiary exists—such as when an estate or certain charities are named—the account may become subject to the five-year rule or the decedent’s remaining life expectancy payout structure depending on whether required beginning date rules apply. 

The presenters emphasized that advisors must carefully review old beneficiary designations and trust language because many pre-SECURE Act plans assumed lifetime stretch treatment that no longer exists. 

Planning Implications

The compressed payout period can create:

• Accelerated income taxation 
• Higher marginal tax brackets 
• Increased Medicare IRMAA exposure 
• Net investment income tax issues 
• Reduced long-term compounding opportunities 

For high-net-worth families, this creates planning opportunities involving:

• Roth conversions 
• Charitable planning 
• Multi-generational trust planning 
• Strategic beneficiary selection 

The presenters noted that advisors should pay close attention to whether annual required minimum distributions (RMDs) apply during the 10-year period. IRS regulations finalized in 2024 clarified that many beneficiaries must continue annual distributions during years one through nine if the decedent had already reached required beginning date status.

Conduit Trusts vs. Accumulation Trusts

A substantial portion of the session focused on trust drafting for retirement accounts, particularly the distinction between conduit trusts and accumulation trusts.

Conduit Trusts

Under a conduit trust structure:

• IRA distributions received by the trust must immediately pass through to the beneficiary. 
• The trust acts primarily as a “pipeline.” 
• Historically, conduit trusts were widely used to preserve stretch IRA treatment. 

Accumulation Trusts

Under an accumulation trust:

• The trustee may retain IRA distributions inside the trust. 
• Funds can remain protected from creditors, divorce claims, spendthrift behavior, or outside influence. 
• Trustees gain flexibility regarding timing and amount of distributions. 

Key Planning Tradeoffs

The presenters emphasized that the SECURE Act made many conduit trusts less desirable because the entire IRA balance may now need to be distributed outright to beneficiaries within 10 years.

That outcome may:

• Expose inherited assets to divorce 
• Increase creditor vulnerability 
• Accelerate taxation 
• Undermine long-term asset protection goals 

Accumulation trusts can solve many of these concerns but create other challenges, including compressed trust income tax brackets.

Important Tax Consideration

Trusts reach the highest federal income tax bracket at very low income levels compared to individuals. For 2025, trusts generally reach the top 37% federal bracket at taxable income exceeding approximately $15,000.

As a result, accumulation trusts require careful balancing between:

• Asset protection 
• Income tax efficiency 
• Distribution flexibility 

The presenters strongly recommended collaboration between estate planning attorneys, CPAs, and financial advisors when drafting or revising trust provisions. 

Flexible Trust Structures and the “Teapot Trust”

Alan Gassman discussed the concept of the “Teapot Trust,” designed to create flexibility in inherited IRA distribution planning among multiple beneficiaries.

Core Concept

Rather than forcing equal distributions each year, the trust allows trustees to:

• Allocate distributions strategically 
• Consider beneficiaries’ tax brackets 
• Adjust for financial need 
• Preserve fairness over time 

Example Discussed

The presenters described scenarios in which:

• One beneficiary may already be in a high income tax bracket 
• Another beneficiary may be temporarily unemployed or in a lower bracket 
• Distributions can therefore be directed in a more tax-efficient manner 

The trust can preserve long-term economic equality while reducing aggregate family taxation.

Advisor Implications

This structure may be particularly valuable for:

• Multi-child families 
• Blended families 
• Unequal beneficiary circumstances 
• Long-term dynasty trust planning 

The presenters emphasized that flexibility provisions and trustee discretion are increasingly important in modern estate planning because future tax laws and beneficiary circumstances remain uncertain.

Disclaimer Planning and Post-Death Flexibility

The session devoted significant attention to disclaimers as a post-death planning technique.

Key Disclaimer Rules

To qualify under Internal Revenue Code Section 2518:

• The disclaimer must generally occur within nine months of death 
• The disclaiming party cannot accept benefits from the asset 
• The disclaiming individual cannot direct where the asset ultimately passes 

Planning Uses

Disclaimers may help:

• Shift assets into bypass or credit shelter trusts 
• Redirect retirement assets to contingent beneficiaries 
• Facilitate charitable planning 
• Improve tax efficiency after death 

Important Cautionary Example

Alan Gassman shared an example where a surviving spouse used a debit card connected to an account before disclaiming it. That action constituted acceptance of benefits and invalidated the disclaimer opportunity.

Practical Advisor Takeaways

Advisors should:

• Educate surviving spouses quickly after death 
• Freeze certain accounts temporarily when appropriate 
• Coordinate immediately with legal counsel 
• Review contingent beneficiary structures in advance 

The presenters cautioned that disclaimer planning often fails because families wait too long or misunderstand operational rules. 

Charitable Remainder Trusts (CRTs) as SECURE Act Planning Tools

The webinar explored charitable remainder trusts as a possible replacement for stretch IRA planning in certain high-net-worth situations.

CRT Planning Benefits

When retirement accounts pass to a CRT:

• The IRA may avoid immediate income taxation 
• Beneficiaries can receive income streams over time 
• Remaining assets eventually pass to charity 

The presenters discussed Net Income Makeup Charitable Remainder Trusts (NIMCRUTs/NEMCRUTs), which may provide additional flexibility.

Potential Advantages

CRTs may:

• Replicate stretch-like cash flow 
• Smooth taxable income over multiple years 
• Support philanthropic objectives 
• Reduce concentrated tax spikes 

Important Limitations

The presenters emphasized:

• CRTs are complex 
• Administrative costs may be significant  
• Charitable intent must be genuine 
• Payout rules are highly regulated 

This strategy tends to work best for:

• Larger retirement accounts 
• Charitably inclined families 
• Beneficiaries with high marginal tax rates 

Qualified Charitable Distributions (QCDs)

Scott Levine reviewed planning opportunities involving qualified charitable distributions from IRAs.

Key Rules

• QCDs are available beginning at age 70½  
• Transfers must go directly from the IRA custodian to charity 
• QCDs can satisfy required minimum distributions 
• QCDs are excluded from taxable income 

The presenters referenced the 2026 QCD limit of approximately $111,000 per taxpayer, indexed for inflation.

Planning Benefits

QCDs may:

• Reduce adjusted gross income 
• Lower Medicare premium surcharges 
• Reduce taxation of Social Security benefits 
• Provide tax-efficient charitable giving  

Important Limitation

The presenters clarified that charitable remainder trusts cannot receive QCDs directly as qualifying charities.

Advisors were encouraged to coordinate charitable planning carefully with beneficiary designation strategies and annual RMD planning.

Beneficiary Designations: Common Errors and Planning Traps

The presenters repeatedly emphasized that beneficiary designations override wills and often override client intent when not updated properly.

Common Problems Discussed

• Ex-spouses remaining as beneficiaries 
• Minor children named outright 
• Failure to coordinate trust language 
• Naming estates unintentionally 
• Inconsistent contingent beneficiaries 

Important Advisor Takeaway

Estate plans should include regular beneficiary designation reviews for:

• IRAs 
• 401(k)s 
• Life insurance 
• Annuities 
• Transfer-on-death accounts 
• Payable-on-death accounts 

The presenters noted that beneficiary designation errors remain one of the most common and preventable estate planning failures.

Creditor Protection and Divorce Protection Strategies

A recurring theme throughout the session was preserving inherited wealth from:

• Lawsuits 
• Divorce 
• Bankruptcy 
• Financial mismanagement 

Key Concepts Discussed

The presenters highlighted:

• Spendthrift trust provisions 
• Accumulation trust structures 
• LLC ownership arrangements 
• Delaware tenancy by the entireties structures 
• State-specific asset protection laws 

Delaware LLC Planning

Alan Gassman discussed using Delaware LLCs in states that do not fully recognize tenancy by the entirety protections.

This approach may:

• Enhance creditor protection 
• Improve charging order protections 
• Provide centralized management 

Divorce Protection Concerns

The presenters emphasized that inherited assets can become vulnerable if beneficiaries:

• Comingle inherited funds 
• Retitle assets jointly 
• Lack proper trust protections 

The session included cautionary stories involving surviving spouses who later remarried or lost inherited assets through poor planning decisions.

Life Insurance Trust Planning

The presenters reviewed irrevocable life insurance trusts (ILITs) and related estate tax considerations.

Key Planning Points

• Properly structured ILITs can exclude life insurance proceeds from the taxable estate 
• The insured generally must survive three years after transferring existing policies into trust to avoid estate inclusion 
• Trustee selection and Crummey withdrawal powers remain important 

Goodman’s Triangle

Scott Levine discussed Goodman’s Triangle, where:

• One party owns the policy 
• Another party is the insured 
• A third party is the beneficiary 

Improper structuring can inadvertently trigger gift tax consequences.

Advisor Implications

Advisors should coordinate:

• Ownership 
• Beneficiary designations 
• Premium funding 
• Trustee powers 

with both tax and estate planning counsel.

Real Estate Titling and Probate Avoidance

The presenters spent time discussing how real estate ownership structures impact probate, taxes, and creditor protection.

Key Issues Discussed

• Joint tenancy 
• Community property 
• Revocable trusts 
• LLC ownership 
• Ancillary probate risks 

Revocable Living Trusts

The presenters generally favored revocable trusts for probate avoidance and continuity of management.

Potential benefits include:

• Avoiding multiple probate proceedings 
• Simplifying incapacity planning 
• Maintaining privacy 
• Streamlining administration 

Important Practical Point

Alan Gassman emphasized checking with:

• Insurance carriers 
• Mortgage companies 
• Title insurers 

before transferring real estate into LLCs or trusts.

Digital Assets and Estate Planning

The webinar concluded with a discussion of digital asset planning.

Important Assets Identified

• Email accounts 
• Cloud storage 
• Online banking 
• Cryptocurrency 
• Photos 
• Passwords 
• Social media accounts 

Key Risks

Without proper authorization and documentation:

• Families may lose access permanently 
• Valuable records may disappear 
• Identity theft risks may increase 

Planning Recommendations

The presenters encouraged:

• Use of password managers 
• Digital inventories 
• Authorized fiduciary access 
• Inclusion of digital asset provisions in estate documents 

The session previewed a future masterclass devoted specifically to digital asset planning. 

Practical Advisor Takeaways

1. Review Old Trusts Immediately

Many pre-2020 trust structures may no longer function optimally after the SECURE Act.

Advisors should review:

• Conduit trust provisions 
• Beneficiary designations 
• Trust accumulation language 
• Trustee flexibility provisions 

2. Coordinate Tax and Asset Protection Planning

The “best” trust structure is not always the one with the lowest tax burden.

Planners must balance:

• Income tax efficiency 
• Creditor protection 
• Divorce protection 
• Family governance 
• Long-term flexibility 

3. Update Beneficiary Designations Regularly

Beneficiary designations should be reviewed:

• After marriages or divorces 
• After births or deaths 
• Following major tax law changes 
• During retirement planning reviews 

4. Consider Post-Death Flexibility

Disclaimer planning, trust protector provisions, and flexible trustee powers can significantly improve planning outcomes when future circumstances are uncertain.

5. Address Digital Assets Proactively

Digital asset planning is rapidly becoming a core estate planning issue rather than a niche concern.

External Reference Sources

Internal Revenue Service (IRS)

Required Minimum Distribution Rules
https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-required-minimum-distributions

Inherited IRA Rules and Beneficiary Guidance
https://www.irs.gov/publications/p590b

Qualified Charitable Distributions (QCDs)
https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-iras-distributions-withdrawals

Disclaimer Rules Under IRC Section 2518
https://www.irs.gov/publications/p559

Estate and Gift Tax Information
https://www.irs.gov/businesses/small-businesses-self-employed/estate-and-gift-taxes

U.S. Securities and Exchange Commission (SEC)

Investor Bulletin: Updated Investor Guidance for Inherited IRAs
https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins

Social Security Administration (SSA)

Social Security Retirement Benefits
https://www.ssa.gov/retirement

CFP Board

Estate Planning Competency Resources
https://www.cfp.net

Uniform Law Commission

Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA)
https://www.uniformlaws.org/committees/community-home?CommunityKey=f7237fc4-74c6-4728-81c6-b39a91ecdf22

American Bar Association (ABA)

Estate Planning and Probate Resources
https://www.americanbar.org/groups/real_property_trust_estate

FINRA Investor Education Foundation

Managing Money in Retirement and Fraud Prevention
https://www.finra.org/investors