The best way to navigate these IRA rollover rules is to completely avoid them by using a custodian-to-custodian direct transfer and skip the many mistakes associated with the 60-day rollover deadline, including those which cause the entire distribution to be immediately taxed along with the 10% early distribution penalty.

Proceed with caution in pursuing trust modifications or a trust decanting since the IRS appears to be eager to find a taxable gift by the trust beneficiaries.

If you have read this far, you will now concluded that a hybrid trust is intended as a substitute for a DAPT, principally caused by some unfortunate Comments to the Uniform Voidable Transactions Act. A hybrid trust starts out as a conventional third-party trust, where the settlor retains no interest in or control over the trust, yet the settlor may be added back to the trust by a trust director as a discretionary trust beneficiary (just like a DAPT.) So, if you encounter the term hybrid trust hopefully you will have a better understanding what that label means.

Proving undue influence can be difficult due, in part, to the lack of direct evidence and the possible use of a presumption of undue influence in some situations.

Exploiting the Delaware Tax Trap to gain an income tax basis adjustment for assets that are subject to a power of appointment is fundamental to estate planning. How and when that ‘trap’ is ‘triggered’ thus becomes important. There are also several different considerations involved in working with, and/or around, the ‘trap’ that makes drafting the power of appointment particularly challenging. But if the goal is to increase basis in assets, becoming familiar with the Delaware Tax Trap is a first step.

Nvidia has been in the news a lot these days, receiving lots of attention by the investment community. It’s CEO, Jensen Huang, worth about $127 billion, recently received (probably) some unwanted attention at the same time from some SEC filings. The current Tax Bill before Congress would not eliminate or curtail the use of GRATs, IDGTs, or stop transfers by private foundations to donor advised funds. These effective estate planning strategies and techniques could still be used to avoid transfer taxes.  The large applicable exemption amount will continue. Apparently,  some of the perceived estate planning ‘loopholes’ will also continue as the deficit continues to grow.

As a generalization, any distribution from a qualified plan (401(k) or an IRA is taxed as ordinary income to the recipient. However, there is the exception when a qualified plan holds stock in the company that sponsors the qualified plan, where the company stock will be taxed at long term capital gains rates if certain conditions are met.

The income tax consequences of a CRUT are more than just the tiered taxation regime under IRC 644. The exchange or termination of a CRUT has other unusual tax consequences that must be factored into the decision to exchange or terminate the CRUT.

The recent House Ways and Means budget proposal would expand some of the benefits associated with 529 accounts, ABLE accounts, and health savings accounts.

The new Code Y will be a helpful reminder to IRA owners and their tax advisors to make sure that the tax benefits of a QCD are claimed. However, traditional IRA owners who make their charitable donations using a QCD will need to make sure that their donation satisfies all the other QCD conditions and rules, e.g., age 70 ½, a direct distribution from the IRA custodian, etc. The receipt of a Form 1099-R with Code Y from the IRA custodian still will not guarantee that the donation qualifies for tax-free treatment.