Take-Away:  Learning the SECURE Act’s new distribution rules, and the exceptions to those rules, will be a new challenge. The SECURE Act provides several new ‘rigid’ rules and effective dates with regard to distributions from inherited retirement accounts. Those new rules can lead to some pretty strange results. A few examples follow- Grandfathered Stretch Distribution […]

Take-Away: An individual who is disabled, as defined by the Social Security Administration, or who is certified as chronically ill, is defined under the SECURE Act as an eligible designated beneficiary who is entitled to use the life-expectancy distribution regime with regard to inherited retirement benefits. One issue associated with these two classifications is how […]

Take-Away: Earlier I addressed how a disabled beneficiary of an inherited IRA account is treated as an eligible designated beneficiary who is entitled to use stretch distributions over his/her life expectancy. However, the Tax Code’s definition of disability is very narrow, and thus hard to meet. A recent case that dealt with the disability waiver […]

Take-Away: The Michigan Trust Code imposes several distinct duties on a trustee to inform trust beneficiaries. Currently the State Bar’s Probate and Estate Planning Council is looking at possible changes to those duties, exploring the possible use of a silent or quiet trust in Michigan. Background: The Michigan Trust Code (MTC) adopted one of the […]

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 […]