Take-Away: The worries that some commentators had expressed that clawback of lifetime gifts brought back into a donor’s taxable estate on death could cause estate tax problems after the doubled estate tax exemption falls in 2026 were eliminated by an IRS proposed Regulation. But the order in which the exemption is applied coupled with the […]

Take-Away: As more individuals direct their retirement accounts and IRAs to be paid to irrevocable trusts to exploit the required minimum distribution (RMD) rules,  consider creating a separate trust that is designed solely to receive those pre-tax retirement assets to accommodate all of the unique ‘see-through’ trust rules and limitations. Background: Beneficiaries of a retirement […]

Take-Away: Recent changes to ABLE accounts make them more attractive, especially for families that cannot afford legal fees to create a special needs trust. However, there are still plenty of drawbacks to creating and funding an ABLE account. Background: An individual whose disability or blindness commenced prior to age 26 is eligible to adopt an […]

Take-Away: Generally, the Michigan Trust Code requires two co-trustees to act in unanimity. What happens when one co-trustee delegates his/her authority to the other co-trustee? Reported Decision: In the Matter of the Fund for the Encouragement of Self Reliance, An Irrevocable Trust, 135 Nev. Adv. Opinion (March 21, 2019) Facts: The Nevada Supreme Court was […]

Take-Away: The SECURE Act is a Bill now being considered by Congress. The Bill has considerable bipartisan support, which means that parts of it might actually become law in the next couple of years. If adopted, the SECURE Act would have a dramatic impact on retirement planning (both contributions and distributions.) If some of the […]

The following is a checklist compiled by David A. Handler and Kristen A. Curatolol that appeared in the April 2019 edition of Trusts & Estates. Plan for incapacity Fund the revocable trust Make tax-free gifts Make charitable gifts during life Use gift tax exemptions Make taxable gifts Reduce state estate taxes Substitute low basis trust […]

Take-Away: When an individual nears the end of his or her life, some steps can be taken to mitigate future tax liabilities. While during the time they have remaining there are no doubt far more important things to take care of by the terminally ill individual and his/her family, advisors can provide  helpful advice to […]

Take-Away: Many of us have heard of the so-called ‘Marriage Penalty’ with regard to income tax liabilities. Less known is the concept of the ‘Widow’s Penalty’ (or the ‘Widower’s Penalty.’) The 2017 Tax Act actually made the Widow’s Penalty even worse in some situations when it broadened the federal income tax brackets for jointly filed […]

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 […]