Take-Away: Some trust beneficiaries look at their trustee as their agent who is required to respond to the beneficiary’s directions. A federal appeals court in California recently disagreed that a trustee serves in an agency capacity with regard to the trust’s beneficiaries. Case: Banks v. Northern Trust Corp, 929 F.3d 1046 (2019) Issue: The facts […]

Take-Away: As a broad generalization, when a charitable trust is created, the belief is that only the Attorney General can bring a lawsuit to enforce that charitable trust. The Michigan Court of Appeals just held that the trustee of the decedent’s trust who distributed the assets to the university for charitable purposes could sue the […]

Take-Away: A recent Michigan Court of Appeals decision effectively ‘punished’ a son who claimed that he was following his deceased father’s directions. The son made a gift when he testified that he was carrying out his father’s testamentary direction. From the fact, however, I am not sure we should feel sorry for the son. Case: […]

Take-Away: A Bill has been floating around Lansing for a few years now that would provide liability relief to an individual who serves as the trustee of an irrevocable life insurance trust (ILIT). Unfortunately, this Bill has not received much traction, and it is debatable if it will ever become Michigan law. The fact that […]

Take-Away: The unearned income generated by a uniform transfer to minors act account (UTMA) will be taxed to the minor. However, after $2,100 in reported income, the balance of the UTMA’s income will be taxed at the  parents’ marginal income tax rate. A 529 account is a better tool to use to save for the […]

Take-Away: While Michigan  recognizes the validity and use of a postnuptial agreement, if history is much of any indication, they are frequently viewed as against Michigan’s public policy and thus they are not enforceable by courts in a future divorce. Thus, conditioning a trust distribution on the beneficiary entering into a postnuptial agreement may prove […]

Take-Away: Recently the South Dakota Supreme Court held that an order of a California state court that required the direct payment by the trustee for the beneficiary’s child support obligation was an enforcement mechanism and thus not entitled to the protection of the Full Faith and Credit Clause of the U.S. Constitution. This is just […]

Take Away: A recent federal District Court decision reminds us that if the donor of a gift fails to pay the federal gift tax that is due, the IRS can demand payment of the gift tax from the donee, even if more than ten years have passed since the gift was made. In this reported […]

Take-Away: With the recent focus on obtaining an income tax basis ‘step-up’ to assets on an individual’s death, there is a lot of discussion with regard to terminating existing credit shelter trusts and returning trust assets to the lifetime beneficiary of that trust, so that upon the beneficiary’s subsequent death those distributed trust assets will […]

Take-Away: The current low interest rates, as reported in October’s IRC 7520’s rates, are attractive for may estate planning strategies like intra-family loans, grantor retained annuity trusts (GRATs), charitable lead annuity trusts (CLATs), and charitable gifts of remainder interests in homes and farms. These same low interest rates have an opposite effect, however, on qualified […]