Missives

The holding period of a Roth 401(k) account is not ‘tacked’ onto a Roth IRA to which the 401(k) funds are transferred for purposes of determining if a qualified distribution can be taken from the Roth IRA.

The designated beneficiaries of the decedent’s IRA now have additional time in which to take the decedent’s year-of-death final required minimum distribution (RMD.)

Under a Michigan undisclosed, or silent, trust the trustee is not required to produce trust accounts to anyone. If that is the case, does the statute of limitations on the trustee’s administration of the trust ever run?

The application of Michigan’s default rules for the allocation or apportionment of estate or inheritance taxes can often lead to surprises, and thus unequal inheritances, when the decedent’s estate plan relies, in part, on ladybird deeds, transfer-on-death beneficiary designations, or sizable IRAs with designated beneficiaries.

Anytime there is a marriage, death, divorce, or birth of a child or grandchild, it is important to review existing beneficiary designations to avoid the possibility that someone other than the account owner’s intended beneficiary will receive their retirement funds.

While a QTIP Trust is a great way to defer incurring federal estate taxes until the surviving spouse dies, that device is also highly limiting in how the surviving spouse can plan his/her own estate when the QTIP Trust assets will be included in the survivor’s taxable estate.

In its final required minimum distribution (RMD) regulations, the IRS confirmed that if the deceased IRA owner was over his/her required beginning date (RBD) at the time of his/her death, the beneficiary of that inherited IRA must take annual RMDs over the 10 years that follow the IRA owner’s death.

The Tax Code’s ‘at least as rapidly rule’ creates some surprises when it comes to the need to take annual required minimum distributions from an inherited IRA.

Yet another federal court has held the Corporate Transparency Act (CTA) to probably be unconstitutional. There has been a flurry of activity in the federal courts in the past few weeks leading to a nationwide injunction against the enforcement of the Corporate Transparency Act (CTA.) Career Colls. & Schools of Texas v Department of Education, 98 F.4th 220 (Fifth Circuit Court of Appeals, December 2024.) Yet another federal District Court, also from Texas, chimed in last week to also enter a nationwide injunction against the CTA.

A surviving spouse who inherits their deceased spouse’s IRA can continue that inherited IRA (not roll it over) and gain some new benefits.