Take-Away: An incapacitated retiree who had her IRA deposited to her bank account was taxed even though she never actually received them. Reported Decision: Nice v United States, (U.S. District Court, Eastern District of Louisiana) No. 18:7362 (October 16, 2019) Facts: Mary Ellen Nice (Mary) was the widow after 61 years of marriage. Her husband […]

Take-Away: A federal court will treat a revocable trust as a legal entity that is separate from its settlor. This was done in order to expose the trust’s assets to satisfy the trust’s (not the settlor’s) creditors under strange facts. Reported Decision: JPMorgan Chase Bank, N.A. v Larry J. Winget; Larry J. Winget Living Trust, […]

Take-Away: Preliminary data culled from tax returns suggest that the 2017 Tax Act has had a negative impact on charitable giving, as many predicted. Background: The 2017 Tax Act radically changed many income tax provisions that affect charitable giving. Some of these important changes (i) doubled the size of the standard income tax deduction for […]

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: 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: 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: On September 15, 2019, the law changed with regard to the federal Thrift Savings Plan, which has over 5 million plan participants. The TSP Modernization Act of 2017 is supposed to provide much greater flexibility for participants to access their retirement savings account with more rights of withdrawal. Background:  The Thrift Saving Plan (TSP) […]

Take-Away: Michigan’s Trust Code adopted part of the Uniform Trust Code’s non-judicial settlement agreement provision. However, Michigan’s version of that model statute does not go as far as other state’s versions, like Delaware, with regard to what modifications can be made to an irrevocable trust by an agreement without the approval of a probate court. […]

Take-Away: Last Friday the IRS published Final Regulations with regard to the transfer and sale of life insurance policies. Those Regulations include a description of the 2017 Tax Act’s new IRC Sections 101(a)(3) and 6050Y that relate to the sale of life insurance policies, the reporting of that sale of the insurance policy to the […]

Take-Away: Roth 401(k) accounts are similar, but not the same, as a Roth IRA. Additionally, contributions to a Roth 401(k) account are not always treated the same as an after-tax contribution to a Roth IRA account. These different rules can sometimes lead to confusion and missed opportunities. Background: 401(k) accounts, Roth or traditional, start with […]