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Beneficiary Income Accumulation Trust (BIAT®)

What if your existing estate plan could do more? For many families and business owners, the answer lies not in rebuilding your plan from scratch, but in adding a powerful provision that makes everything you already have work harder. That is the focus with BIAT.

What Is BIAT?

Beneficiary Income Accumulation Trust, or BIAT provisions, are  trust planning provisions developed to optimize the way income, assets, and distributions flow through your existing estate plan. Rather than replacing your revocable living trust, spousal lifetime access trust (SLAT), irrevocable life insurance trust (ILIT), or retirement benefit trust, BIAT provisions are incorporated into those structures to unlock a wider range of tax, creditor protection, and administrative benefits.

At its core, BIAT shifts the income tax obligation to the beneficiary rather than the trust itself. This is a significant advantage. By restructuring how income is taxed, BIAT provisions can meaningfully reduce the overall tax burden on trust assets, year after year.

Watch this video about BIAT:

Why BIAT Provisions Matter for Your Estate Plan

Most estate plans are built around a common set of goals: protecting assets, minimizing taxes, and making sure wealth passes efficiently to the people you love. What many families discover, often years after their plan was drafted, is that the structure of their trust can quietly erode the very wealth it was designed to protect.

BIAT provisions address this directly. By incorporating them into new or existing trusts, we can help our clients achieve:

  • Greater income tax savings through beneficiary-level taxation instead of compressed trust tax rates
  • More income tax deductions available to beneficiaries, including deductions not accessible to the trust itself
  • Stronger long-term creditor protection, wrapping assets in a durable legal structure that resists claims from future creditors, divorcing spouses, or lawsuits
  • Reduced estate and generation-skipping transfer (GST) tax exposure, allowing more wealth to pass to children, grandchildren, and future generations
  • Lower professional and administrative fees by consolidating and streamlining trust management
  • Less paperwork and red tape, simplifying the ongoing administration of complex trust structures
  • More money reaching your beneficiaries, which is the whole point

BIAT and Your Existing Trusts

One of the most powerful aspects of BIAT provisions is their flexibility. They are not a separate trust you create in isolation. They are strategic additions to the trusts you may already have in place.

Revocable Living Trusts. If you have a standard revocable living trust, BIAT provisions can be layered in to strengthen its downstream planning. When assets transition from a revocable trust to an irrevocable structure at death or incapacity, BIAT language governs how income accumulates and distributes, preserving more value for beneficiaries.

Spousal Lifetime Access Trusts (SLATs). SLATs are a popular tool for married couples seeking to remove assets from their taxable estates while keeping a spouse as a beneficiary. BIAT provisions enhance SLATs by optimizing the income tax treatment of trust assets during the surviving spouse’s lifetime, and strengthening creditor protection for future generations.

Irrevocable Life Insurance Trusts (ILITs). An ILIT holds life insurance outside of your estate, keeping death benefit proceeds out of the federal estate tax calculation. BIAT provisions integrate with ILITs to ensure that income generated inside the trust is taxed as efficiently as possible and that future distributions to beneficiaries are maximized.

Retirement Benefit Trusts. For those with significant IRA or 401(k) balances, directing those assets to a BIAT-enhanced trust can help navigate the post-SECURE Act distribution landscape, extending the tax-deferred benefit period for non-spouse beneficiaries within the rules now governing inherited retirement accounts.

Who Benefits Most from BIAT Provisions?

BIAT provisions are especially valuable for certain groups of clients. You may be a strong candidate if:

  • You have an existing estate plan that has not been reviewed or updated in more than three years
  • Your estate includes significant taxable assets, retirement accounts, or business interests
  • You are in a high-risk profession (physician, attorney, real estate professional, business owner) where creditor protection is a priority
  • You are looking for trust assets that are not diminished by compressed trust income tax rates
  • You have children or grandchildren as trust beneficiaries and want to maximize what they ultimately receive
  • Your estate plan includes one or more irrevocable trusts that would benefit from income tax efficiency improvements

Our Approach to BIAT Planning

We do not believe in one-size-fits-all planning. When you come to us about BIAT provisions, we begin with a thorough review of your existing estate plan. We look at the structure of your current trusts, the nature of your assets, your family’s goals, and your tax situation. From there, we determine whether BIAT provisions are the right fit, how they should be drafted, and how they integrate with any planning already in place.

This is what “360 degrees of legal solutions” means in practice. Estate planning does not exist in a silo. It connects to your business structure, your tax strategy, your retirement accounts, and your family’s long-term financial picture. We bring all of those perspectives to the table when we work with you.

Why Kelleher + Holland for BIAT Planning

BIAT reflects years of advanced estate and tax planning work on behalf of families, professionals, and business owners across Illinois, Florida, and more than a dozen other states.

Our estate planning team works alongside our corporate, tax, and asset protection attorneys so that your BIAT provisions are coordinated with every other element of your legal and financial structure. When you work with us, you are not getting a standalone trust document. You are getting a plan that accounts for your full picture.

Get Started with a BIAT Consultation

If you already have an estate plan, there is a real possibility that BIAT provisions could make it work significantly harder for you and for the people you love. The best way to find out is to have us take a look.

Schedule a consultation with our estate planning team. We will review your existing plan, assess whether BIAT provisions are a fit, and explain what the benefit could look like for your family.

Contact us at attorneys@kelleherholland.com or call 847-382-9195. You can also schedule online at kelleherholland.com/contact.