How to Use Your Estate Plan to Save Tax Now: A Timely Update

Consider an upstream basis trust and a general power of appointment for an older family member to reduce capital gains taxes on highly appreciated assets.

File folders, one of which is labeled Estate Plan.
(Image credit: Getty Images)

An upstream basis trust can be used to minimize capital gains on assets sold during your lifetime. This is done by providing an older family member (Mom, Dad or Grandpa) a power of appointment in your trust holding appreciated assets with low or no basis.

A general power of appointment (GPOA) empowers the holder of the power to give away or direct the distribution of your property upon your death. This “power of appointment” provides a step-up in the assets in the trust upon the power holder’s death.

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John M. Goralka
Founder, The Goralka Law Firm

Founder of The Goralka Law Firm, John M. Goralka assists business owners, real estate owners and successful families to achieve their enlightened dreams by better protecting their assets, minimizing income and estate tax and resolving messes and transitions to preserve, protect and enhance their legacy. John is one of few California attorneys certified as a Specialist by the State Bar of California Board of Legal Specialization in both Taxation and Estate Planning, Trust and Probate.