Take-Away: The 2017 Tax Act eliminated the ability to recharacterize a converted Roth IRA back into a regular IRA, effective January 1, 2018. However, Roth IRA conversions done in 2017 can still be recharacterized ‘back’ to a traditional IRA if that recharacterization occurs before October 15, 2018. Since a Roth IRA recharacterization takes time to […]

Take-Away: An IRA that was made payable to the trustee of a Joint Trust, which became irrevocable on the death of the IRA owner, was nonetheless permitted to be rolled out of the Joint Trust and into a rollover IRA by the surviving spouse. As a result, the IRA was not treated as an inherited […]

Take-Away: A donor who negotiates  ‘naming rights’ in connection with a substantial philanthropic gift to a tax exempt entity could be jeopardizing his/her full charitable income tax deduction due to the Tax Code’s excess benefit rule. Background: A donor has the burden of proof of the fair market value of the amount that the donor […]

Take-Away: Michigan has two separate statutes that permit a trustee to decant trust assets to a new trust created by the trustee to ‘fix’ or ‘update’ on older irrevocable trust. While those statutory powers, whether the trustee actually decides to exercise a statutory power to decant trust assets is another matter. Background: Twenty-seven states have […]

Take-Away: On August 8, Treasury published its proposed Regulations to implement the new 20% income tax deduction with respect to qualified business income for flow-through entities like S corporations, partnerships and sole proprietors. Unfortunately the Treasury’s proposed Regulations seem to derail two planning strategies to enable professionals to take advantage of the 20% income tax […]

Take-Away: We all know that elder abuse is on the rise in our society. The Financial Industry Regulatory Authority (FINRA) took note of this problem and in February it implemented new rules in an effort to better protect vulnerable elderly adults from the financial exploitation by others. Background: Over the years FINRA has adopted rules […]

Take-Away: Several ways exist to obtain an income tax basis adjustment for assets held in a long-time irrevocable trust. The lifetime trust beneficiary can exercise a limited power of appointment in trust for another beneficiary [the Delaware ‘tax trap’]. The trust can be modified to give to the lifetime trust beneficiary a general power of […]

Take-Away: While there were few, if any, relevant last-minute statutes passed in Lansing in late December that impact estate planning in general,   or Wills and Trusts I particular, we can expect some helpful legislative activity in the coming months before the state Legislature takes a long summer break in this, yet another, election year. Much […]

Take-Away: If an individual considers the adoption of a Qualified Dispositions in Trust, aka Michigan’s version of an asset protection trust, the trust instrument may need to restrict the settlor’s retained rights to only direct trust investments or veto trust distributions among the other rights that the settlor may retain in their qualified dispositions trust. […]

Take-Away: For Medicaid  planning purposes some states, but not Michigan, follow the ‘name on the check’ rule, that permits a shift of income from the institutionalized spouse to the community spouse without jeopardizing an institutionalized spouse’s Medicaid eligibility to protect the community spouse. Background: The name on the check rule is a common guideline used […]