Take-Away: IRC 2703 is one of the special valuation rules that is used for rejecting values in transactions among family members that claim valuation discounts. In applying the rule, the concepts of  agreement and family are broadly construed, but there is some help with a statutory safe harbor and exception. Background:  As we enter a […]

Take-Away: Rolling funds from a qualified plan to an IRA on termination from employment, and then taking a distribution from the IRA prior to age 59 ½, will cause the IRA owner to incur the 10% additional tax in addition to the income tax on the distribution. Background: The Tax Code imposes a 10% additional […]

Take-Away: A power of appointment can be exceptionally helpful to change the ultimate disposition of property under a Will or Trust to address changes in the law or changes in a beneficiary’s circumstances. However, there are always traps to be wary of when exercising a power of appointment. Background: A power of appointment is not […]

Take-Away: A couple of years ago the Probate and Estate Planning Section of the Michigan Bar proposed a bill to allow spouses to transfer their tenants-by-the-entireties property to a trust where the property would continue to be classified as tenants-by-the-entireties, even though title was nominally held in the trust. We are still waiting for that legislation […]

Take-Away: The federal Corporate Transparency Act (the Act), which creates a national beneficial ownership registry, applies to certain business entities. Fortunately, the Act does not appear to apply to common law Trusts (yet.) Background: The Corporate Transparency Act was enacted on January 1, 2021. The Act requires both (i) business entities (Reporting Companies) to report […]

Take-Away: Some states, but sadly not Michigan, protect an inherited IRA from the inheritor’s judgement creditors. Background: Because substantial wealth in our society is held in IRAs, the protection of those assets from creditor claims is critically important in estate planning. Both federal and state laws generally provide considerable protection to IRAs from judgment creditors […]

Take-Away: Each state applies its own public policy when it comes to whether a Trust’s provisions are enforceable void. Often this public policy analysis evolves into the arcane of whether a trust provision imposes an unenforceable condition or a legally enforceable limitation.  Background: The Michigan Trust Code requires that for a Trust to be valid, […]

Take-Away: Formula gifts and sales are growing in popularity with regard to hard-to-value assets. The formula is used to avoid the possibility of an imputed taxable gift after an IRS audit. While some formula gifts work, other formula transfers are viewed against public policy and consequently ignored. Background: With increasing frequency, individuals are using defined […]

Take-Away: The estate planning community seems to be preoccupied with encouraging  married couples to adopt spousal lifetime access trusts (SLATs). An alternate estate planning strategy that might also be considered by a married couple is the gift to a lifetime qualified terminable interest property (QTIP) Trust. Background: With the fear of a sudden reduction of […]

Take-Away: IRAs are exempt from creditor claims under Michigan’s exempt property statute. Unlike other states, Michigan’s statute is silent when it comes to protecting inherited IRAs. It is possible, though, that distributions from an inherited  IRA will also be exempt from creditor claims under Michigan’s statute. Background: As has been covered in the past, (admittedly […]