Take-Away: The Michigan statute that revokes a provision in a Will or trust when a former spouse dies is fairly broad, which can lead to many assumptions, some of which might not always be accurate. In additional, there are limits to what governing documents are impacted by the Michigan revocation-on-divorce statute. Background: This topic has […]

Take-Away: Apparently Michigan does not (yet, at least) formally recognize the cause of action for a tortious interference with an inheritance, while about half the states do recognize this common law cause of action. Those states that refuse to recognize this tort action seem to believe that a probate judge has plenty of remedies available […]

Take-Away: Interesting income tax consequences occur if a decedent-parent bequeaths or cancels an unpaid installment note back to the child who is obligated to make the payment. Example: A parent might sell the family cottage or a closely held business interest to a child on an installment note basis. How the capital gain from that […]

Take-Away: The separate share rule is relatively simple provision under the Tax Code. However, the application of the separate share rule with regard to how it assigns taxable income (DNI) under an estate or trust is not so simple. The application of the rule can cause trust beneficiaries to be treated unequally. The separate share […]

Take-Away: Despite a broadly phrased spendthrift provision in a trust, there still can be narrow situations where a creditor may be able to access the beneficiary’s income interest in the spendthrift trust. Background: The Michigan Trust Code defines a spendthrift provision as a term of a trust that restrains either the voluntary or involuntary transfer […]

Take-Away: Michigan’s legislature is currently looking at the adoption of the Uniform Directed Trustee Act. If that Act is adopted, a directed trustee will only be held liable when the trustee follows the adviser’s directions if the trustee’s misconduct is willful. The directed trustee will not be held liable for negligence when it follows the […]

Take-Away: Many changes were made by the 2017 Tax Act (the Act) to real estate, both for individuals and for those who are engaged in real estate development. Some of the changes are well known, e.g. the ‘capped’ $10,000 SALT itemized income tax deduction, while other changes are less well known, such as restricting IRC […]

Take-Away: We now are in that time of the year where thoughts turn to making gifts as part of end-of-the-year tax planning. Yet often trusts are funded with incomplete gifts for federal gift tax reporting purposes. An incomplete gift is one of the salient features of an intentional non-grantor trust (ING-trust) that is designed to […]

Take-Away: A non-spouse beneficiary cannot use a 60-day rollover with regard to an inherited traditional IRA. Only a custodian-to-custodian transfer of the inherited IRA will work to avoid immediate income taxation of the inherited IRA. Background: One critically important distribution rule is that a non-spouse beneficiary cannot perform a 60-day rollover of an inherited IRA. […]

Take-Away: I previously reported on FINRA rule 2165 which was effective on February 5, 2018. In response to a follow-up question that I received, this rule does not mandate a report of suspected financial exploitation by the investment advisor. Background: In February of this year FINRA announced two new rules. Trusted Person: FINRA rule 4512 […]