Take-Away: If a client has fully utilized their applicable federal gift and estate tax exemption amount on lifetime gifts, they should consider the use of a net gift agreement if they want to continue to move appreciating assets out of their taxable estate through lifetime gifts. Better yet, they should consider using a net-net gift […]

While the tax reform proposal was released this morning, there are only a few details to share, which is consistent with prior ‘proposals’ that were publically floated earlier this year. Key points in the newest  tax reform proposal include the following: Repeal of the federal estate tax in 2024. Repeal of the Alternative Minimum Tax […]

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 […]