Take-Away: The IRS recently published the inflation adjustments for some of the tax exemptions or exclusions that we regularly work with on behalf of our clients. Source: Revenue Procedure 2019-44 2020 Exemption Amounts: Basic Exclusion Amount (BEA): was $11.4 million per individual; for 2020 the BEA will be $11.58 million for an individual (this is […]

Take-Away: An antilapse statute provides for an alternate gift if the intended recipient of the gift dies prematurely. The Estates and Protected Individuals Code provides antilapse statutes for both Wills and for Trusts, and for beneficiary designations, all of which are closely aligned but can be slightly different in effect when implemented. Background: An antilapse […]

Take-Away: Generally, property that is inherited or received by gift during a marriage is treated as the recipient’s separate property in a future divorce. However, there are exceptions to this general rule, both under Michigan common law and statutes, and with other state’s statutes, that permit a divorce judge to ‘invade’ one spouse’s separate property. […]

Take-Away: The Tax Code’s self-dealing rules are designed to prohibit perceived abuses when financial transactions are entered into between a disqualified person and a private foundation. As a surprise to some, these same self-dealing prohibitions also apply to charitable lead trusts (CLTs) and charitable remainder trusts (CRTs.) The penalties associated with self-dealing transactions are onerous. […]

Take-Away: Reports out of Washington D.C. are that the Setting Every Community Up for Retirement Enhancement, aka the SECURE Act, may be attached to the $1.4 trillion spending bill for fiscal year 2020. December 20 is the deadline for approving that spending bill before another government shutdown is upon us. Timing: That spending bill, tied […]

Take-Away: Just to keep us on our toes, there are two different Roth IRA 5-year seasoning rules with regard to the taxation of distributions from a Roth IRA account which we need to keep straight. The difference results if the Roth IRA was created through contributions or if the Roth IRA was created via a […]

Take-Away: I was recently asked why a provision regularly appears in irrevocable trusts that ties the hands of the trustee in making distributions. I explained that the regularly recurring provision that elicited their question is called the Upjohn provision that is intended to avoid trust assets being included in an individual trustee’s taxable estate. This […]

Take-Away: We know that if an IRA owner dies after his or her required beginning date (currently age 70 ½) but before he or she takes their full required minimum distribution (RMD) in the year of their death, the beneficiary of that IRA must take the deceased IRA owner’s RMD for that year. That is […]

Take-Away: Last week we covered nonjudicial settlement agreements to change how a trust is administered. In the past, we have covered the various provisions of the Michigan Trust Code that authorize the modification, or in some cases termination, of an irrevocable trust. We have also reviewed Michigan’s two decanting statutes, where the trustee creates a […]

Take-Away: A look back at the past 10 years reinforces the conclusion that there has been anything but certainty when it comes to the federal estate, gift and GST tax laws. It is challenge for advisors to give sound and practical planning advice to individuals when the transfer tax laws change as dramatically and frequently […]