Take-Away: The IRS confirms that the failure to cash a distribution check from a qualified plan is still included in the participant’s taxable income for the year, including automatic withholding of income taxes. Background: The Tax Code provides that any amount actually distributed to a distributee by an employees’ trust [IRC 401a], which trust is […]

Take-Away: A testator possesses the right to leave his or her property by Will. However, the rights of the beneficiaries to the testator’s property are subject to the restrictions and limitations of EPIC which are intended to facilitate the prompt settlement of the decedent’s estate and its administration, including the payment of the decedent’s debts. […]

Take-Away: When dealing with vehicle and boat titles, it is a good idea to not hold title to the vehicle in the joint name of spouses. Rather, the title to the vehicle should be held in the name of the person who most frequently operates the vehicle. This title holding is for liability protection purposes. […]

Take-Away: Questions always seem to come up with regard to proper way to handle a decedent’s required minimum distribution (RMD) in the year of his or her death. Three basic rules with regard to these retirement plan distributions should be kept in mind. Rule #1- RMD Only if the Decedent was Beyond the Required Beginning Date: The […]

Take-Away: Estate planning with the use of grantor trusts receives a lot of attention these days. The benefit of using a non-grantor trust are often overshadowed by grantor trusts for moderately wealthy individuals, yet in many cases taxes can be saved with the use of a non-grantor trust. Background: A non-grantor trust is taxed as a separate legal entity, unlike a grantor […]

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 […]