Jeff Levine on the Planning Tug-of-War: Income vs. Estate

Dec 18, 2025

Join Jeff Levine, a prominent CPA and CFP, as he shares his expertise in tax and estate planning. He dives into the tug-of-war between income and estate taxes, explaining why these strategies often conflict. Jeff discusses the trade-offs of gifting appreciated assets versus preserving the step-up in basis, and when income tax planning should take precedence. He also reassesses traditional credit shelter trusts and highlights the importance of flexibility in irrevocable trusts. This insightful conversation offers practical guidance for financial planners navigating complex client needs.

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INSIGHT

Step-Up Versus Lifetime Gifting Trade-Off

You generally cannot both preserve step-up in basis and remove assets from your estate to avoid estate tax at the same time.
Including assets in your taxable estate gives heirs a basis step-up but risks estate tax if exemptions are exceeded.

INSIGHT

Most Clients Should Prioritize Income Taxes

For most families today, beneficiary income tax outcomes matter more than federal estate tax exposure.
Current high exemptions mean the majority should prioritize income-tax-efficient strategies like preserving step-up in basis.

ADVICE

Pick The Primary Tax Objective First

Determine whether estate or income tax is the primary problem before recommending transfers or trust funding.
Tailor actions based on client type, especially distinguishing business owners from typical families.

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In this episode, host Cary Sinnett is joined by Jeff Levine, CPA, CFP, a nationally recognized tax planning thought leader, to examine one of the most persistent dilemmas in personal financial planning: the tension between income tax strategies and estate tax minimization.

They explore why these two priorities often conflict and walk through practical examples CPA financial planners face when advising clients on gifting, step-up in basis, trust structures, and navigating compressed tax brackets. Jeff explains how changes to the federal estate tax exemption, evolving client priorities, and multi-generational considerations require a fresh look at long-standing estate planning techniques.

Whether you are working with high net worth business owners or everyday clients with legacy concerns, this episode offers clear guidance on when to prioritize short-term tax efficiency, when to focus on long-term wealth transfer, and how to serve both goals when possible.

Topics Covered:

Why estate and income tax strategies often work against each other
The trade-off between gifting highly appreciated assets versus preserving step-up in basis
When income tax planning should take priority even for affluent clients
Rethinking outdated uses of credit shelter trusts in the modern exemption environment
Grantor versus non-grantor trusts and the income tax implications of each
Building flexibility into irrevocable trusts through toggling, decanting, and situs changes

AICPA Resources:

Toolkit: Year-end planning
Article: Tax Trifecta Trust after H.R. 1
Article: Year-End Planning Through the Lens of H.R. 1
Guide Excerpt: The Adviser's Guide to Financial & Estate Planning: V4

This episode is brought to you by the AICPA's Personal Financial Planning Section, the premier provider of information, tools, advocacy, and guidance for professionals who specialize in providing tax, estate, retirement, risk management and investment planning advice. Also, by the CPA/PFS credential program, which allows CPAs to demonstrate competence and confidence in providing these services to their clients. Visit us online to join our community, gain access to valuable member-only benefits or learn about our PFP certificate program.

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