Take-Away: It is common to find in discretionary trusts use of the historic ascertainable standard “health, education, maintenance, and support.” This phrase finds its origins in the Tax Code, yet even the Tax Code’s Regulations do not attempt to define the term health. The concept of health may be a bit more elastic than originally […]

Take-Away: Former Governor Snyder signed into law what is informally called the Michigan Divided Trustee Act, the (Uniform)Directed Trust Act, and replaced the term trust protector with a new term, trust director. Many of the changes are now part of the Michigan Trust Code, located at MCL 700.7704B. Three separate House Bills [6129, 6130, and […]

Take-Away: A variable annuity is an investment tool that is sometimes used to defer income recognition with regard to grow wealth, but it carries some unique income tax ‘attributes’ [that’s putting it mildly] that often make it an unattractive investment strategy. If an individual is considering the the purchase of a variable annuity, he/she might […]

Take-Away: While the 2017 Tax Act liberalized the use of IRC 529 Higher Education Accounts to permit distributions to pay for tuition for elementary and secondary schools, up to $10,000 a year, not all states have jumped on that bandwagon. Background: An IRC 529 account is an investment account that is created by a donor […]

Take-Away: Michigan adopted, with a couple of modifications, the Uniform Directed Trust Act. It displaces the former Michigan trust protector provision, replacing it with a new section of the Michigan Trust Code. The Act permits a third party, also a fiduciary, to direct or otherwise control certain conduct of the trustee. The key point is […]

Take-Away: While the new Michigan Uniform Directed Trust Act is closely based on the Uniform Directed Trust Act, the version that Michigan adopted departs is several respects from the Uniform Act to afford greater protection to the directed trustee. Background: While the overriding goal of a Uniform Act is to have consistency across multiple jurisdictions […]

Take-Away: The meaning and effect of the terms of the trust are determined primarily by the jurisdiction that is designated in the trust instrument. The exception to this general rule is if the selected jurisdiction’s law is contrary to the strong public policy of the jurisdiction that has the most significant relationship with the matter […]

Take-Away: The Final Regulations for IRC 199A were published on January 18, 2019. These Final Regulations carry forward most, but not all, of the same limitations to planning strategies that were provided in the Proposed Regulations of August, 2018. The Final Regulations will be of interest to clients who own specified services trades or businesses […]

Take-Away: One planning strategy that came to light after IRC 199A appeared in the Tax Code was to use multiple non-grantor trusts so that each trust owned a part of a business that generated qualified business income. As a result, each irrevocable trust (or its beneficiaries who received trust distributions) could claim its own IRC […]

Take-Away: The Final IRC 199A Regulations, and IRS Notice 2019-7 seem to create a safe harbor that permits owners of rental real estate to qualify for the IRC 199A income tax deduction. As a generalization, ‘triple-net’ leased real estate will be excluded from the IRC 199A income tax deduction. The rental real estate owner will […]