Take-Away: There are several tax benefits associated with the use of a grantor trust. One danger to stay away from, however, is establishing a ‘pattern, practice or routine’ where the trustee exercises its discretion to reimburse the settlor using the trust’s assets with regard to the settlor’s obligation to pay the income tax liability of […]

Take-Away: When a surviving spouse of a qualified terminable interest trust (QTIP) moves to another state, there is the risk that the new domicile state may impose a state estate tax on the QTIP trust’s assets. Background: A couple of years ago the U.S. Supreme Court had the opportunity to review the necessary connections a […]

Take-Away: While the Uniform Probate Code has a ‘substantial compliance’ exception to following the rigid rules with regard to a Will’s execution formalities, a court may not be as accommodating with regard to conditions that are attached to the testamentary gift that is from a trust. An interesting Court of Appeals decision echo’s this principle. […]

Take-Away: Naming a trust as an IRA beneficiary is complicated. It can also be very expensive when you consider that an irrevocable trust is at the highest marginal federal income tax bracket of 37% when the trust’s income, which includes IRA distributions to the trust, exceeds roughly $13,300 during the year. Background: As we know […]

Take-Away: For a gift to be valid in Michigan, three elements must exist: (i) the donor’s intent to transfer property gratuitously; (ii)actual or constructive delivery of the property to the donee; and (iii) an acceptance of the transfer by the donee. Background: With all the discussion these days about making large large gifts to children and grandchildren in […]

Take-Away: The federal generation skipping transfer tax (GST) is highly complicated, both in its application, and when and how the GST exemption(s) are available and applied (intentionally or automatically.) With the growing interest in funding dynasty trusts now, before 2026 when the GST exemption is expected to be cut in half, it is important to […]

Take-Away: Under Michigan’s Trust Code, the presence of a spendthrift provision in the trust instrument is generally considered to be a material purpose of the trust, thus controlling to some extent any efforts to subsequently modify the trust. Modifications, or terminations, of a trust must be consistent with the trust’s material purposes. What the trust’s […]

Take-Away: There is a Bill languishing somewhere in the House of Representatives that would amend the Tax Code to increase the age when required minimum distributions (RMDs) begin from age 72 to age 75. The Bill would also relieve an IRA owner from having to take an RMD if the aggregate balance of all defined […]

Take-Away: In something of a surprise, an agent who acts under a durable power of attorney is not treated as a fiduciary under the Michigan Estates and Protected Individual’s Code (EPIC). As the state’s Legislature actively looks at numerous proposed Bills to prevent financial elder abuse, it might consider amending  EPIC to designate an agent […]

Take-Away: With the attention given to the 2016 Chan Zuckerberg LLC initiative a few years ago through which Mark Zuckerberg carries out his charitable giving, charitable limited liability companies (LLCs) have been gaining in popularity in recent years as an alternative to the use of a private foundation. Background: The perceived benefit of using a […]