Take-Away: With most of the SECURE Act provisions becoming effective in 2020, existing estate plans and retirement plan and IRA beneficiary designation forms will need to be reviewed, particularly those estate plans that feature large IRA and 401(k) accounts. A few practical observations follow. Acceleration of Taxable Income: Perhaps the biggest problem, by far, is […]

Take-Away: Last week provided a broad overview of the SECURE Act’s changes to retirement plan contributions and distribution. The next couple will dig a bit deeper into the substance of those changes, and in particular on retirement plan distributions to trusts. This summary deals with the 10-year payout rule for inherited IRAs and qualified plan […]

Take-Away: 2019 was a busy year when it comes to rule changes and reminders with regard to retirement plan distributions. A short summary of some of those changes follows, starting with the most obvious, the SECURE Act that passed last week. Secure Act: Key changes that arise from this December Act are: Age 70 years […]

Take-Away: Earlier summaries have provided an overview of some of the SECURE Act changes and a look at the new 10-year distribution rule for designated beneficiaries of IRAs. This summary goes a bit deeper into the impact of the SECURE Act’s 10-year distribution rule on some standard estate planning trusts. I. Marital Trusts: As previously […]

Take-Away: The Michigan Court of Appeals recently confirmed the inability of creditors to attack a beneficiary’s interest in a discretionary trust under the Michigan Trust Code, notwithstanding the fact that the trust instrument used the words shall apply to or for the benefits of…. and that the beneficiary was then delinquent in his child support […]

Take-Away: The ‘name of the game’ in drafting trusts these days is flexibility, in order for the trust to be able to adjust to the constantly changing tax laws. In addition, flexible trusts address future changes in the circumstances of both beneficiaries and fiduciaries which is critical with a dynasty type trust that is expected […]

Take-Away: Presidential candidate Bernie Sanders has proposed a massive overhaul of the transfer tax system. If Mr. Sanders becomes President, and the color of Congress changes to blue in 2020, there could be a dramatic reduction in the gift and estate tax exemptions along with the effective elimination of many conventional estate planning techniques. Summary […]

Take-Away: With the emphasis these days on saving income taxes more than gift and estate taxes, it is important to have a working knowledge of the income taxation of irrevocable trusts. Trustees that are aware of these income taxes are inclined to make distributions of income to trust beneficiaries in order to shift that taxable […]

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 […]