Take-Away: The rules that govern distributions from retirement accounts are bewildering. Mistakes are often made when funds in a retirement account are moved that result in a taxable distribution, along with a penalty and interest. Fortunately, if the ‘fumble’ is caught soon enough, it can be ‘fixed’ without too much of a hassle. Distribution Fumbles […]

Take-Away: Planning for retirement account distributions is critical in light of the amount of wealth now held and accumulated in qualifed plans like 401 (k) accounts and IRAs. Unfortunately, the distribution rules are complex, and several have timing rules that are inflexible that can lead to the assessment of penalties. As a result, it is important to pay […]

Take-Away: While we are far less concerned about the value of transferred assets these days due to the large federal estate and gift tax exemptions, valuation discounts are still relevant when we consider the sunset of those large exemptions beginning in 2026 (or even sooner if there is a ‘blue wave’ in the 2020 election.) […]

Take-Away: More and more small business owners look for ways to restructure their business (S corporation or LLC) in order to be able to claim an IRC 199A 20% deduction from their qualified business income. One planning step that should be considered is the adoption of a qualified defined pension plan for the small business, […]

Take-Away: A charitable remainder trust(CRT) must be irrevocable if it is to provide the income and estate tax benefits that are intended by its settlor. But sometimes life takes sudden turns, and the CRT does not work as well as originally intended. While the CRT must be irrevocable and it is somewhat inflexible, the beneficiaries […]

Take-Away: Consider expanding the distribution standard used in trusts, beyond the conventional health, education, support and maintenance language, with broader definitions of those words to reflect the changing world in which we, and trust beneficiaries, currently live. Background: The fairly ubiquitous ascertainable standard that is used in many trusts authorizes distributions by the trustee for […]

Take-Away: Existing non-grantor irrevocable trusts can be converted to grantor trusts for income tax reporting purposes either through a trust modification proceeding or the exercise of a decanting power held by the trustee. Such a conversion would enable to settlor to substitute low basis assets held in the trust with high basis assets held by the […]

Take-Away: In a period where flexibility is frequently desired in the administration of an irrevocable trust, to adapt the trust to constantly changing tax and property laws, or to modify the trust to reflect changes in the circumstances of trust beneficiaries, one popular tool used to make a trust more flexible is the trustee’s ability […]

Take-Away: Often trust instruments have as part of their ‘boilerplate’ provisions the trustee’s power to divide or consolidate trusts. Those provisions are usually included in anticipation that the trust has a generation skipping transfer tax implications which need to be navigated and assets segregated in order to preserve and best utilize the settlor’s generation skipping […]

Take-Away: Last week the U.S. Supreme Court issued its long awaited decision in North Carolina Department of Revenue v. The Kimberly Rice Kaestner 1991 Family Trust, 588 U.S. ___ (Issued June 21, 2019). The Court unanimously affirmed the decision of the North Carolina Supreme Court, which held unconstitutional North Carolina’s income tax statute that had […]