Missives

New IRC 68 poses a significant challenge to the administration of trust and estates, more than just how income tax returns are prepared, as it creates phantom income tax liability that affects fiduciary administration in several significant ways.

First, that while there is a safe harbor for contributions to a Trump Account that will cause the transfer to be treated as a transfer of a present interest, it does not create an ‘extra’ annual exclusion gift opportunity (‘in addition to’)  for the contributor.

More and more advisors feel comfortable recommending that their clients consider funding a DAF, not only for income tax purposes, but also because they are easy to understand and workable for complex asset giving and family philanthropy.

A spousal rollover is when the surviving spouse, named as the designated beneficiary of his/her deceased spouse,  can move the deceased spouse’s traditional IRA funds into his/her own traditional IRA.

Take-Away: For married individuals who want to plan for a basis adjustment on death, consider the potential use of a community property trust that is now available in 5 states (but not Michigan.)

Michigan’s state estate tax was what was informally called a ‘pick-up transfer tax’ in that its state estate tax was equal to the amount collected on the federal estate state tax credit that the IRS then allowed, i.e., money that would have been paid as a federal estate tax was instead paid to Michigan.

Moving title to real property into or out of a trust can possibly trigger an uncapping of the real property’s state equalized value if rules and definitions are not closely followed and small steps are not taken.

ESG considerations in retirement plan investment options has come under heavy scrutiny (not to mention both political posturing and threats) over the past decade.

We were told that the OB3 tax law changes were permanent. But no one really believes that these taxes are really permanent, or that they can plan their estates knowing that these tax laws will never change.

The Committee for Responsible a Federal Budget (now there’s a committee with a lot of work ahead of it!) recently calculated that the Social Security Trust Fund will be depleted sometime in 2032.