Take-Away: A recent Bankruptcy Court decision added more confusion to whether an inherited 401(k) account is protected if the inheritor files for bankruptcy Background: I have regularly complained (probably to anyone who will listen to me) that the current tax code and its Regulations with regard to contributions to and distributions from the various types […]

Take-Away: A bill has been filed in Congress that would make significant changes, both good and bad, to the qualified business income tax deduction under IRC 199A. Anything that would make this tax deduction easier to understand and implemented would be welcome. Background: IRC 199A generally allows business owners of pass-through entities, like LLCs, to […]

Take-Away: A recent study with regard to Michigan donor advised funds might provide additional support for a Congressional change to require faster distributions from donor advised funds. Background: A recent missive referenced a bill currently before Congress to  accelerate distributions from donor advised funds (DAFs.) That bill, co-sponsored by Senator King (Independent, Maine) and Senator Grassley […]

Take-Away: With Medicare and Medicaid benefits now comprising a large part of each state’s annual budgets, many states are now passing laws in an attempt to curb eligibility to receive Medicaid benefits. Some of those state laws seem often seem to go a bit ‘too far.’ Background: It is no secret that Medicaid has become a […]

Take-Away:  There initially was some concern if an individual made a large lifetime gift using her or his available applicable exclusion amount, that could come back and haunt the grantor at the time of death if at that time the applicable exclusion amount was lower, either after 2025, or earlier if Congress reduces the applicable exclusion […]

Take-Away: An inherited IRA cannot be rolled over to another inherited IRA. Background: We are accustomed to individuals making a 60-day rollover of their IRA to another IRA. [IRC 408(d)(3).] We normally caution those individuals against such a move since mistakes can lead to missing the 60-day deadline, in turn leading to a taxable distribution […]

Take-Away: No-contest clauses are ubiquitous in trusts these days. The growing tendency to expand the scope of no-contest clauses could, however,  have a chilling effect on beneficiaries who may not be willing to assume a risk of forfeiture in order to hold a fiduciary to account or to ask for clarification of ambiguous trusts. Background: […]

Take-Away: With an increasing interest in individuals purchasing life insurance to provide estate liquidity with her applicable exemption schedule to drop by over 50% in the next four years, there is renewed interest in life insurance trusts. Those asked to serve as the ILIT trustee should think twice before accepting the position as trustee of […]

Take-Away: The direct gift of tuition is not classified as a gift. Accordingly, the payment of an individual’s tuition is neither treated as a taxable gift nor does it utilize the donor’s annual exclusion gift opportunity. Background: This is the time of year when parents and grandparents start to think about fall and the coming school […]

Take-Away: The direct payment of another individual’s medical expenses is not treated as a taxable gift. Unlike the direct payment of tuition, the direct payment of medical expenses is much more broadly defined. Background: As previously reported, the direct payment of another individual’s tuition obligation is not treated as a gift, and thus not subject to […]