Take-Away: A minor child named as the beneficiary of their parent’s retirement account is classified as an eligible designated beneficiary under the SECURE Act. The distribution rule is straight forward if the minor is named directly as the beneficiary of their parent’s IRA. More than likely, however, the parent will direct their IRA be paid […]

Take-Away: Under the SECURE Act, a surviving spouse is treated as an eligible designated beneficiary who is entitled to continue to use the former stretch distribution rule over the surviving spouse’s life expectancy. When one spouse dies leaving their retirement assets to their surviving spouse, or to a trust for their spouse’s benefit, usually one […]

Take-Away: Previously we covered the surprising Tax Court decision in Powell which applied IRC 2036(a) (2) to include in a decedent’s taxable estate the value of limited partnership interests because the decedent, as a limited partner, could vote with the general partner(s) to liquidate the limited partnership, thus retaining some level of control over the […]

Take-Away: A tax that we tend to ignore, or simply want to forget because it is overly complex so that we really do not fully understand it, is application of the federal generation skipping transfer (or GST) tax. This and subsequent missives will attempt to provide a basic overview of the GST tax and situations […]

Take-Away: A direct skip transfer of assets from an individual to another individual who is two or more generations removed from the transferor is subject to the generation skipping transfer (GST) tax. A transfer of assets to a trust can also constitute a taxable GST direct skip. What should be a relatively simple concept to […]

Background: A GST taxable termination is the termination, by death, lapse of time, release of a power, or otherwise, of an interest in property that is held in trust. Any termination of a present interest held in a trust will be treated as a taxable termination unless one of two specified exceptions applies. As a […]

Take-Away: Decanting a trust that is generation skipping transfer (GST) tax exempt is a dangerous proposition since the IRS refuses to give any guidance on the tax implications of decanting the assets from the GST exempt trust to a new trust that is created by the trustee. Background: In 2011, the IRs announced that it […]

Take-Away: Some states actually recognize a putative spouse and will authorize the distribution of intestate or surviving spouse benefits to that putative surviving spouse. Background: In the past, we have covered (some would say ad nausea) the concept of a common law marriage and the fact that nine states still recognize some form of a […]

Take-Away: Much attention is given these days to powers of appointment, either in connection with adding flexibility to dynasty-type trusts, or to intentionally expose the value of trust assets to estate inclusion in cause an adjustment to the income tax basis in a trust’s assets in the hands of the remainder beneficiaries, or to eliminate […]

Take-Away: Estate planners have yet another acronym to learn and discuss with their clients: the family advancement sustainability trust, or FAST. The purpose behind a FAST is to bring the focus of estate planning, along with finances, to the identification and preservation of the individual’s qualitative goals. In short, a FAST is intended to preserve […]