Take-Away: Several state income tax statutes are now being successfully attacked in courts across the nation on the grounds that the imposition of the state income tax is a violation of the Constitution’s Due Process Clause. As such, there exists the need to spend a bit more time selecting the administrative situs of an irrevocable […]

Take-Away: Despite the dramatic increase in the federal estate tax exemption amount it is probably premature to advise an individual to terminate an irrevocable life insurance trust (ILIT) as no longer necessary Tax laws continue to change and a trust provides far greater protection against judgment creditor claims that a trust beneficiary may face. Background: […]

Take-Away: When an IRA or retirement account is made payable to an irrevocable trust, the goal is to assure that the trust satisfies the IRS’ see-through rules so that the oldest individual trust beneficiary’s life expectancy can be used to determine the taxable required minimum distributions that the trustee must take from the retirement account. […]

Take-Away: It comes as no surprise that much of our client’s wealth these days is now tied up in IRAs (traditional, Roth, SEP and SIMPLE) as well as in 401(k) accounts. Control of these retirement assets, by default, passes to a conservator, or agent acting under a durable power of attorney, if the retirement asset […]

Take-Away: To confirm our short telephone conversation of this morning, the tax laws pertaining to IRAs and qualified plan benefits can be a bit confusing, but in general,  community property laws are ignored when it comes to distributions from IRAs that hold community property interests. Qualified Plans: Community property rules do not affect the income […]

Take-Away: The U.S. subjects its citizens to U.S. federal income tax and transfer tax on their worldwide income and assets.  But the U.S. distinguishes between a U.S. citizen and a non-U.S. citizen, resident or non-resident, for  U.S. taxation purposes. Not all resident non-U.S. citizens can escape U.S. federal income and transfer taxes on their worldwide […]

Take-Away: The Michigan Court of Appeals held this past June that a trust beneficiary who occupies a residence held in the name of the trustee can have the residence qualify for the Personal Residence Exemption (PRE) for Michigan real property tax assessment purposes. Source: Breakey v. Michigan Department of Treasury, Michigan Court of Appeals (June […]

Take-Away: I was asked to prepare a short ‘checklist’ to follow to determine if an individual can take advantage of the qualified charitable distribution. The qualified charitable distribution can satisfy the individual’s required minimum distribution (RMD) for the calendar year, which in turn reduces their federal income tax liability for the year. A qualified charitable […]

Take-Away: A helpful reminder is that state law determines a property interest, while the federal law determines how to tax those property interests. Words used in the Tax Code may have a much different meaning when those same words are used in a trust’s discretionary distribution provision.   Background: Considerable time is spent looking that […]

Take-Away: The law of undue influence is subject to a variety of shifting evidentiary rules that can at times be confusing. Sometimes there is a presumption of undue influence, and other times there is no presumption. Where it becomes confusing is when an individual is identified as having a confidential or fiduciary relationship with the […]