Take-Away:  Most of us are familiar with the use of the ascertainable standard , i.e. distributions limited to a beneficiary’s health, education, support or maintenance  (HEMS) used in trusts. As something of a surprise, the HEMS standard appears in three separate provisions of the Tax Code, two that deal with the taxation of the exercise […]

Take-Away: Under Michigan’s probate statutes, a spouse who is willfully absent from their deceased spouse for more than one year automatically forfeits his/her rights to take an intestate share or to serve in a fiduciary capacity over their spouse’s estate or affairs. For some reason our Courts have spent a lot of judicial energies diving […]

Take-Away: Apparently spouses are still adopting joint Wills in Michigan, much to my surprise. These documents often create considerable litigation after the death of the second spouse who thought that he/she could adopt a new Will. We have yet another decision from the Michigan Court of Appeals that obviously indicates that the surviving spouse did […]

Take-Away: The contributions that a small business makes to a retirement plan can impact the size of that business’ IRC 199A qualified business income tax 20% deduction. S corporate shareholders might be better off making Roth contributions, while LLC members and partners in partnerships might be better off making pre-tax contributions to a 401(k) account, […]

Take-Away: As was indicated a week or so ago, the proposed Treasury Regulations published on November 20 make it clear that the fear of ‘claw-back’ when calculating an individual’s estate taxes if an individual makes large lifetime gifts before 2026 is unwarranted. A couple of folks asked for a clearer definition of the ‘claw-back’ problem […]

Take-Away: New proposed Treasury Regulations may make it easier for a plan participant to take a hardship distribution from a qualified plan but only if the qualified plan permits hardship distributions to its participants. Background: A qualified plan may permit hardship distributions (withdrawals) by participants from their account balance. The Regulations specify that a hardship […]

Take-Aways:  Often we intentionally help clients plan to obtain an income tax basis ‘step-up’ of an appreciated asset on the death of a spouse now that federal estate tax minimization is less of a concern. As part of that basis planning: Consider the possibility of a qualified disclaimer by a surviving spouse in lieu of […]

Take-Away: The last increase in IRA contribution limits occurred in 2013. Larger retirement plan contribution limits will be permitted in 2019,  hopefully encouraging more individuals to save for retirement. Source: Treasury Notice 2018-83 IRAs: The contribution limit to an IRA for 2019 will increase from $5,500 a year to $6,000. If the taxpayer is over […]

Take-Away: The attempt to use a governing instrument like a Will or Trust to expressly allocate taxable income from a retirement plan or IRA account to a charity will be unsuccessful unless that allocation directive has an economic effect independent of the income tax consequences. Background: Sometimes a 401(k) account or a traditional IRA are […]

Take-Away: In response to new IRC 199A and its 20% income tax deduction for sole proprietorships and ‘pass-through’ entities, one planning strategy was for a business owner to transfer interests in an operating business into several non-grantor trusts, so that each trust could qualify for the IRC 199A deduction with regard to the income that […]