Powell Compliance Review
Why Many Structures Now Deserve a Second
Look
Review
Recent Tax Court decisions have changed how sophisticated estate planning structures are evaluated for estate tax purposes. In particular, the Tax Court’s decision in Estate of Powell v. Commissioner reshaped the analysis under Internal Revenue Code §2036, placing greater emphasis on retained control, fiduciary independence, and the substance of how planning structures actually operate.
As a result, many trusts and entity-based estate plans that were properly designed and implemented years ago may now warrant a careful review to confirm they remain defensible under current law.
Sollertis offers a Powell Compliance Review to help clients assess whether their existing structures continue to function as intended and, where appropriate, to identify practical steps to strengthen them.
What Is a Powell Compliance Review?
A Powell Compliance Review is a focused legal review of an existing estate planning structure, designed to evaluate potential exposure under IRC §2036 in light of Powell and subsequent Tax Court decisions.
The review is not an audit and does not assume that a structure is flawed. Instead, it provides a clear, objective analysis of how control, fiduciary authority, and documentation operate together within the structure.
What the Review Typically Includes
Each Powell Compliance Review is tailored to the client’s specific planning, but commonly includes:
- Review of trust and entity governance provisions
- Analysis of control, removal, and replacement powers
- Evaluation of fiduciary independence under Powell and Larson
- Review of entity-level management authority and voting rights
- Assessment of non-tax business purpose documentation in light of Fields
- A written memorandum summarizing findings and recommendations
Where appropriate, Sollertis coordinates with the client’s existing attorneys, CPAs, and financial advisors.
Who Should Consider a Powell Compliance Review
A Powell Compliance Review is particularly appropriate for clients with:
- Trusts holding interests in LLCs or partnerships
- Centralized “asset hub” or holding-company structures
- Trust protectors or layered fiduciary arrangements
- Estate plans implemented prior to 2017
- A belief that their estate plan is complete and requires no further review
In many cases, the review confirms that the structure remains sound. In others, modest adjustments can materially reduce estate tax risk.
How Sollertis Approaches Powell Compliance
Sollertis focuses on the intersection of tax law, trust law, and entity governance. Our role is not to replace a client’s existing advisors, but to complement them by identifying structural risk, clarifying how current Tax Court guidance applies, and recommending practical, implementable solutions.
Our work in this area is informed by ongoing analysis of Powell, Larson, Fields, and related §2036 developments, as well as by our experience designing and maintaining complex planning structures for business owners, real estate investors, and high-net-worth families.
Taking the Next Step
Estate planning is not static. As tax law evolves, periodic review helps ensure that existing structures continue to achieve their intended objectives.
If you would like to learn more about Sollertis’s Powell Compliance Review services, we invite you to contact us to discuss whether a review is appropriate for your situation.
