Take-Away: The rules that deal with the distribution of an IRA to an irrevocable trust are already a challenge when identifying the oldest trust beneficiary of the see-through trust. It is even a bigger challenge when the trust beneficiary holds a limited power of appointment over the trust principal. Background: Identifiable Trust Beneficiaries: We all […]

Take-Away: In the past week I had three separate inquiries on whether the 2017 Tax Act creates a concern about ‘clawback’ that clients should be aware of when they start to make large lifetime gifts using their ‘new’ $5.0 million gift tax exemption, in light of the 2026 scheduled return to a much lower unified […]

Take-Away: The Annual Heckerling Estate Planning Institute is being held this week in Florida. I receive daily summaries of those estate planning presentations from a nationally known estate planning speaker and prolific writer, Martin M. Shenkman. In Mr. Shenkman’s summary of Tuesday’s Heckerling presentation with regard to the use of directed trustees, he provides a […]

Take-Away: Michigan is one of 17 states that permit self-settled spendthrift asset protection trusts. Michigan’s 2017 version is called the Qualified Dispositions in Trust Act. Unsettled is whether an individual who is not a resident of Michigan can establish an asset protection trust in Michigan. Background: Michigan’s Qualified Dispositions in Trust Act permits an individual […]

Take-Away: The Michigan Probate and Estate Planning Council recently approved and recommended the Legislature’s adoption of the Uniform Directed Trust Act as an addition to the Michigan Trust Code. The Council also recommended the adoption of a fiduciary coordination concept called a divided trusteeship. Finding a legislative sponsor is now the focus of the Council’s […]

Take-Away: With the 2017 Tax Act, we can expect that a lot of clients will want to exploit their new $5.0 gift tax exemption by making lifetime gifts into a ‘dynasty’ type trust for the benefit of their spouse (a SLAT) or a conventional ‘dynasty’ trust for the benefit of their children and grandchildren. It […]

Take-Away:  An overlooked change in the 2017 Tax Act is a change to the understatement of income tax penalty. The normal threshold for a taxpayer to become exposed to the understatement penalty is when the tax on the 1040 return is understated by greater than  10% of the reported tax. However, if the taxpayer claims […]

Take-Away: Apparently there is a lot of chatter these days that professionals need to quickly become independent contractors to position themselves to to claim the 20% deduction from their ‘pass-through’ entity or sole proprietor profits under the new IRC 199A. Before everyone jumps on the independent contractor bandwagon remember that there is no guarantee that […]

Take-Away: Michigan has two trust decanting statutes where trustees can transfer assets to a ‘new’ trust created by the trustee. One statute deals with changes to a trust’s administrative provisions. Another statute deals with changes to a trust’s dispositive provisions. As more clients use irrevocable dynasty-type trusts or spousal lifetime access trusts [SLATs] to exploit […]

Take-Away: A “minor’s trust” is a statutory exception to the normal gift tax annual exclusion rules. Annual Exclusion Rule: For a gift to qualify for the federal gift tax annual exclusion [$15,000 per donee starting this year] the subject of the gift must be a present interest. A present interest  is one that is available […]