The Year of Death RMD: Some Helpful IRS Leniency

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 […]

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Proposed Taxation of Cryptocurrency

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 […]

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Stewardship Trusts

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 […]

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Preferred Partnership ‘Freeze’ Planning

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 […]

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Per Stirpes, Per Capita, and Representation

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, […]

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Death of an IRA Owner

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 […]

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The Uniform Partition of Heirs Property Act

Take-Away: Twenty states, but not Michigan, have adopted this uniform act which is designed to protect heirs who inherit real estate as tenants-in-common, against forced partition by real property speculators. Background: A perceived problem for many heirs is when several of them inherit a piece of family (heirloom) real property, as tenants-in-common. Each heir may […]

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RMD Relief

Take-Away: The IRS has granted relief from penalties for those designated beneficiaries who failed to take a required minimum distribution from an inherited IRA under the SECURE Act Proposed Regulations. The bad news is that the IRS is sticking with its interpretation of the SECURE Act requiring annual required minimum distributions taken by the designated […]

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Rule Against Perpetuities

Take-Away: Perpetual trusts appear to be alive and well, which cannot be said for the Rule Against Perpetuities. Background: A quick look around the country and one can quickly conclude that the ancient Rule Against Perpetuties (RAP)is rapidly losing its effect as a legal doctrine. States are now eager to jump on the bandwagon to […]

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Qualified Plan Amendment Deadline Extended

Take-Away: The IRS just extended the deadline when qualified plans must be amended to reflect changes required by the SECURE Act and the CARES Act. Background: On August 3, 2022 the IRS released Notice 2022-33. That Notice provides an extension for qualified plans to adopt amendments under the SECURE Act. The Notice also addresses the […]

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