Take-Away: We regularly refer to a funded revocable trust as a will substitute. In many respects, that is a correct description. However, that description is not entirely correct. Background: Legal treatises and commentators regularly refer to a revocable trust as a will substitute. That is also how most estate planning attorneys and their clients refer […]

Take-Away: The tax law is silent if the owner of a 529 account has any fiduciary duty to the designated beneficiary of the 529 account. The creation and funding of a 529 account is treated much like a revocable gift because the account owner can retrieve the assets held in the 529 account at any […]

Take-Away: A beneficiary’s power of withdrawal over a trust is normally treated as a general power of appointment. If the trustee is given the power to withhold an otherwise permissible withdrawal by the beneficiary, the trustee’s power may be viewed as a required consent to the exercise of the power of appointment, sufficient to prevent […]

Take-Away: A few of the states that have adopted the Uniform Trust Code (UTC) have created come confusion between the common law and that uniform law’s authorization to modify a trust to reflect changes in the beneficiary’s circumstances (or in some instances the beneficiary’s desires.)  Many trust beneficiaries simply want their trust terminated to be […]

Take-Away: A few weeks back I wrote a piece that rhetorically asked why wealthy clients were not actively using their enhanced $11.4 million federal gift tax exemption, in light of the 2025 sunset along with the media attention given to Bernie Sanders’ campaign bandwagon proposal to dramatically shrink the gift tax exemption to $1.0 million. […]

Take-Away: An old IRA beneficiary designation is still effective despite the owner’s stated intent, days before his death, that all of his assets, including beneficiary controlled assets, should be divided equally among all of his children, not just the one designated IRA beneficiary. Yet an IRA beneficiary designation can be changed through the IRA owner’s […]

Take-Away: Just because an account is owned jointly does not always mean that one of the joint owners can withdraw all of the funds from that joint account without legal consequences. A recently published Michigan Court of Appeals decision describes when the withdrawal of funds from a joint bank account by one joint owner has […]

Take-Away: The assets held in a safe deposit box on the death of a joint tenant were not treated as a lifetime gift by the decedent. Consequently, the contents of the box were part of the deceased tenant’s distributable estate, much to the surprise of the surviving joint tenant of the box. Background: Multiple elements […]

Take-Away: A spousal lifetime access trust, or SLAT, is a grantor trust for income tax reporting purposes. If each spouse creates a SLAT for their spouse, the settlor will continue to pay income taxes on the SLAT’s income. The fact that the SLATs are grantor trusts also means that the transfer of assets between the […]

Take-Away: There are principally four ways in which a non-taxable gift can occur. Gifts that use the donor’s federal gift tax exemption. Leveraged gifts. Gifts that use valuation discount strategies. And direct gifts to pay for tuition and medical expenses and annual exclusion gifts. Some of these gift strategies are more effective, or they carry […]