Take-Away: Health Savings Accounts are a great way to cover medical costs, especially in retirement years, as such expenses increase exponentially with age. The problem is when a Health Savings Account is inherited by a non-spouse. Background: It has been documented that Health Savings Accounts [HSA] increased by 6% in 2020, exceeding 30 million HSA’s […]

Take-Away: Environmental impact, social factors, and governance may be viable investment philosophy for a trust to pursue, but it is not without controversy, especially in light of a trustee’s fiduciary duty of loyalty to trust beneficiaries. Background: There is much discussion these days with regard to a trust investing with a focus on Environmental, Social […]

Take-Away: Last December Congress extended the unlimited charitable contribution for cash gifts to most public charities through the end of 2021. Background: The Covid Relief Act (Act) passed on December 27, 2020 extended the unlimited charitable contribution for cash gifts to most public charities through the end of 2021. [Section 2205 of the Act.] Opportunity: The Act […]

The Applicable Federal Rates (AFR) of interest for August 2021 follow: Short-term AFR (less than 3 years):      0.19% Mid-term AFR     (3 to 9 years):                1.00% Long-term AFR    (9 years and longer):  1.89% (annual); 1.88% quarterly; (1.87% monthly) The IRC 7520 rate used to […]

Take-Away: Confusion reigns whether an inherited 401(k) account is exempt from inclusion in a bankrupt’s estate. It may all turn on timing of when the petition for bankruptcy is filed. Background: As I mentioned in a recent Breakfast Briefing, Michigan is currently looking at amending its exempt property statute to add to IRAs inherited IRAs […]

Take-Away: There is a Bill pending in Lansing that would allow a beneficiary of a Trust to intentionally ‘spring’ the Delaware Tax Trap, and thus cause an income tax basis adjustment to the trust’s assets. Background: At a recent breakfast presentation, I mentioned the Bill that would enact legislation to allow a trust beneficiary to […]

Take-Away: A Bill is pending before the U.S. Senate that would materially change the operations of a donor advised fund and private foundation with the goal to accelerate charitable distributions from donor advised funds and private foundations. Background: Those familiar with philanthropy know just how popular the use of donor advised funds have become over […]

Take-Away: The dividends an employee-shareholder receives from a C corporation will be subject to the net investment income tax. IRS Chief Counsel Advisory: Earlier this year the IRS published Chief Counsel Advisory 2021009 (dated January 4, 2021, and released on May 7, 2021) that determined that dividend income that is received by an individual shareholder […]

Take-Away: As a generalization, an inherited IRA cannot be rolled over by the designated beneficiary into a Roth IRA. However, the designated beneficiary who inherits a qualified plan retirement account can roll the inherited account into a Roth IRA. Background: With the threat of higher income taxes looming, many individuals are seriously exploring the benefits […]

Take-Away: Unlike other designated beneficiaries, a surviving spouse has a couple of options as to the source from which to take the deceased spouse’s year-of-death required minimum distribution (RMD.) Background: A few weeks ago we covered the requirement for the designated beneficiary to take the deceased IRA owner’s ‘final’ RMD if he/she had not taken […]