When clients think of estate planning, they often focus on documents, beneficiaries, and wealth transfer. Yet, some of the most significant planning opportunities are found in less visible tax considerations that can have a lasting impact on families and future generations.
In an episode of the AICPA , host Cary Sinnett, CFP®, CAP®, CFT-I™, CExP™, director of Personal Financial Planning at the AICPA, met with estate planning authority Bob Keebler, CPA/PFS, MST, AEP® (Distinguished), partner at Keebler & Associates LLP, to discuss three areas that frequently create planning opportunities, and sometimes costly mistakes: portability elections, fiduciary income taxation during periods of market volatility, and the often-misunderstood Kenan doctrine. These technical topics may not be top of mind for clients, but they can significantly affect estate, income, and wealth-transfer outcomes.
For CPA financial planners, tax practitioners, and PFS credential holders, understanding these concepts can help uncover opportunities, strengthen client relationships, and deliver more comprehensive advice.
Portability: A critical estate planning opportunity
Portability allows a surviving spouse to utilize a deceased spouse's unused federal estate tax exemption when a timely estate tax return is filed. While the concept itself is straightforward, the planning implications can be substantial. Keebler noted that one of the most valuable services advisers can provide is recognizing when a portability election may be available and ensuring clients understand the filing requirements.
In many cases, the opportunity emerges during an engagement that initially appears routine, such as assisting a surviving spouse with a final income tax return. Identifying the portability opportunity in these moments can help preserve valuable tax benefits that may be needed in the future.
This planning strategy becomes particularly important when viewed through a long-term lens. Estate tax exemptions have changed significantly over time and may continue to evolve. Preserving a deceased spouse's unused exemption can provide flexibility if future legislation reduces exemption amounts.
The lesson for practitioners is clear: Seemingly simple client conversations can uncover meaningful estate planning opportunities.
Looking beyond portability
Although portability can be a valuable planning tool, it should not automatically be viewed as the default solution.
According to Keebler, advisers should also consider generation-skipping transfer (GST) planning, basis management, and broader family wealth-transfer objectives when evaluating estate planning strategies. Depending on the client's goals, bypass trusts or other trust structures may provide greater long-term benefits.
For families focused on preserving wealth across multiple generations, GST planning may take precedence. Others may place greater value on basis step-up planning and income tax efficiency. Effective estate planning requires evaluating all available tools within the context of the family's objectives rather than applying a one-size-fits-all approach.
Why market volatility matters in trust and estate planning
Market swings typically bring investment strategies to mind. However, volatility also creates important considerations during trust and estate administration.
As asset values fluctuate, decisions involving trust funding can trigger unexpected tax consequences. Keebler emphasized the importance of evaluating how appreciated assets are used to satisfy estate and trust obligations, particularly when gains may be recognized as a result of those transfers.
These situations often require collaboration among CPAs, trustees, executors, and estate attorneys to ensure that funding decisions align with broader tax planning objectives. What may appear to be an administrative decision can, in reality, become a significant tax planning opportunity.
The Kenan doctrine and hidden tax consequences
One of the most technically complex topics discussed was the Kenan doctrine, a concept that can catch practitioners by surprise.
Under certain circumstances, satisfying a fixed-dollar bequest with appreciated property can trigger capital gain recognition at the estate or trust level. Two distributions that appear identical from an economic standpoint may therefore produce very different after-tax results.
The planning considerations extend beyond taxation. Advisers must also think about fairness among beneficiaries. Assets of equal current value may carry different built-in tax liabilities, potentially affecting the long-term economic outcome for heirs. Careful planning and communication can help ensure distributions reflect both the client's intentions and the practical realities of taxation.
Expand your knowledge at the PFP Symposium
Professionals looking to deepen their understanding of advanced planning topics will have an opportunity to learn from Bob Keebler and other leading experts at the upcoming AICPA Personal Financial Planning (PFP) Symposium, Jan. 25–27, 2027, in Nashville, Tenn. The event brings together financial planning professionals to explore technical developments, planning strategies, and practice management insights designed to help advisers better serve clients.
New: An immersive Multi-Generational Case Study
A new addition to this year's Symposium is the Blueprint Multi-Generational Case Study, an interactive learning experience designed specifically for financial planners. Participants step into the role of a trusted adviser, helping a family navigate business succession, estate planning, taxes, governance, and wealth-transfer challenges. Throughout the exercise, 10 live actors will represent the members of the family and will be available for in-person questions over the course of the conference.
Rather than focusing solely on technical accuracy, the experience encourages participants to integrate multiple planning disciplines while helping families preserve both wealth and relationships. It offers a practical, real-world approach to applying financial planning principles in complex situations.
Learn more and register for the PFP Symposium.