Missives

Trusts and decedent’s estates are taxed differently, with a lot more flexibility accorded to the taxation of estates. Making a timely 645 election provides that additional flexibility to the decedent’s revocable grantor trust, all of which can help save taxes.

FinCEN’s residential reporting rules that were effective on March 1, 2026, were held to be unconstitutional by a federal District Court in Texas.

Many advisors can relate to the frustrations charities endure just to access a decedent’s bequest when the funds are held by a custodian that insists its ‘rules’ must be followed before the charity can receive its inheritance.

Tension exists if an agent acting under their principal’s durable power of attorney attempts to exercise authority to amend, or terminate, the principal’s revocable trust. If the trustee refuses to recognize that assertion of authority, the trustee might be liable for damages for its ‘unreasonable’ rejection of the durable power of attorney.

The term modern trust is without any single definition, despite it frequently appearing in the new and legal journals. Recently authors have attempted to identify the key characteristics of a modern trust.

Closely held family corporations are ripe for IRC 2036(b) claims as parents move their voting stock out of their taxable estates as part of a comprehensive estate plan. Even sales of voting stock are at risk if the IRS finds a deemed gift if the purchase price is too low.

These Proposed Regulations create a second set of rules that will have to be followed, along with a second election, if the goal is to attract the $1,000 pilot program contribution to a Trump Account. It is nice to see the broad period in which a ‘late’ election for a pilot contribution can be made to a Trump Account, but if one of the key reasons for the pilot contribution is to permit that contribution, along with other contributions to the Trump Account, to compound during the growth period of all Trump Accounts, waiting until the child is age 17 to only then make the pilot-election makes little sense.

Starting March 1, 2026, many residential real estate transactions will have to be reported by the realtor who handles the closing to FinCEN or face substantial civil and/or criminal penalties.

States use different factors to justify imposing income taxes on non-grantor trusts. As these trusts become more complex, it becomes a challenge to assess which states are justified in imposing its tax based on the trust’s nexus with the state.

The IRS extended the time for qualified plan sponsors to implement technical changes to their plans caused by the SECURE 2.0 Act, including the determination of an eligible designated beneficiary along with a few other highly technical rules.