Inside Wealth: Trump's 'big beautiful bill' has a 'double taxation' trap for top earners, tax lawyers say

Late evening view of US Capitol building in Washington DC, USA Richard Sharrocks | Moment | Getty Images A version of this article first appeared in CNBC's Inside Wealth newsletter with Robert Frank, a weekly guide to the high-net-worth investor and consumer. Sign up to receive future editions, straight to your inbox. The " one big beautiful bill " came with many tax benefits for top earners, despite limiting how much they can deduct. However, lawyers for the wealthy said they have discovered a surprise buried in the footnotes of a tax law guide released last week by Congress' policy staff that could amount to double taxation. The deduction cap is imposed on trusts and estates, the lawyers said, which was unexpected. Even if a trust gave all its income to its beneficiaries, it would have to pay taxes on a portion of that income, according to the lawyers' interpretation of the document. While the consequences are steeper for trusts and estates of the ultra-wealthy, trusts with as little as $16,000 in income would also be subject to additional taxes, the lawyers said. "There is potentially an element of double taxation," said Dan Griffith, director of wealth strategy at Huntington Bank. "This is something that is going to affect somebody with a $400,000 special-needs trust. It's not just going to be something that $100 million dynasty trusts suffer with." Griffith said he is especially concerned about trusts that are obligated to distribute all their income. …