Take-Away: Leaving retirement benefits to a disabled or chronically ill designated beneficiary can exploit stretch required minimum distributions. The challenge will be to meet the statutory definitions of disabled or chronically ill. Fortunately the SECURE Act gives us new tool to use, the Applicable Multi-Beneficiary Trust to direct retirement benefits to separate trust shares created […]

Take-Away: The problem with non-grantor trusts is the very high federal income tax imposed on the trust’s accumulated income. There are, though, some sophisticated planning strategies that can be used to mitigate and shift that income away from the trust and to other beneficiaries who will presumably be in a much lower marginal federal income […]

Take-Away: When moving retirement funds between IRAs or from qualified plans to IRAs, it is best, and safest, to move funds in a direct transfer or direct rollover, and skip the 60-day rollover option. Background: Basically, there are three different methods used to move retirement dollars. Two are pretty straightforward. The third is fraught with […]

Some interesting survey results were just released with regard to IRAs by the Investment Company Institute. ici.org/system/files/2022-07/ten-facts-iras.pdf (https://www.ici.org/system/files/2022-07/ten-facts-irs.pdf. At year-end 2021: the percentage  of all U.S. retirement accounts held in IRAs were 35%. the total assets held in IRAs (including traditional and Roth IRAs, SEP IRAs and SIMPLE IRAs) was $13.9 trillion. the percentage of […]

Take-Away: Multiple beneficiaries of an inherited IRA can allocate among themselves the decedent’s final required minimum distribution (RMD) if it was not taken before death by the account owner. Missing the decedent’s final RMD is not the problem it once was, due to a recent change in IRS policy. Background: Once an IRA owner turns […]

Take-Away: A couple of ‘competing’ bills in Congress now seek to bestow special tax status for cryptocurrency, reflecting its dual-purpose. Background: Does cryptocurrency function as currency, or is cryptocurrency more of a speculative investment, when large increases in its value are its hallmark, not its potential as a cash substitute? The dual-purposes of crytocurrency seems to […]

Take-Away: The newest ‘thing’ in the world of trusts is a stewardship trust. It  is a special type of purpose trust that is intended to hold an operating business in perpetuity. Background: In the past we have covered what is a purpose trust,  [MCL 700.2722] which is a trust without a beneficiary who can enforce […]

Take-Away: A preferred partnership can be used to effectively contain or ‘freeze’ the future growth of the preferred partnership interest in a transfer-tax-efficient manner. However,  it is a nightmare to navigate IRC 2701 which will be necessary to achieve the intended successful preferred partnership ‘freeze’ as part of a sophisticated estate plan. Caveat: The following […]

Take-Away: With the Estates and Protected Individuals Code (EPIC) came a new interpretation of the legal term ‘by representation.’ That new interpretation is automatically applied anytime a Will or Trust is amended after April 1, 2000, perhaps unbeknownst to the testator or settlor. Note: A few years back this topic was covered in a missive, However, […]

Take-Away: In general, no contribution can be made to the decedent’s IRA account after his or her death. But,of course, when dealing with the IRS, there are a few exceptions. Background: Most transactions are not permitted with a decedent’s IRA after his or her death. However, some activities with regard to the decedent’s  IRA which are […]