Take-Away: A recent Tax Court decision demonstrates the risk posed with marital deduction gifts, followed by the gift of the recipient spouse, being classified as an indirect gift. Background: IRC 2511(a) provides that a gift tax will apply “whether the transfer of property is in trust or otherwise, whether the gift is direct or indirect, […]

Take-Away: The IRS a year ago issued Final Regulations, effective October 18, 2020,  which confirm that income tax deductions allowed for some costs that are incurred in the administration of a trust or an estate will continue to be tax deductible, notwithstanding the suspension of miscellaneous itemized deductions under the 2017 Tax Act. The Final […]

Take-Away: With the ‘trimmed down’ $1.75 trillion Build Back Better Framework proposed legislation, some of the earlier tax law changes have disappeared, to be replaced by new proposals. (Did I just written a ‘trimmed down’ $1.75 trillion?) Background:  On October 29, 2021, the President announced a $1.75 trillion Build Back Better Framework Act. In order to […]

Take-Away: On November 3, the House Committee added back new tax proposals to the proposed Build Back Better Act that it had removed from the bill in the prior week. Overview: What is going on in Congress the past few weeks reminds me of what I used to do as a teenager, meaning something that […]

Take-Away: A surviving spouse as a designated beneficiary of a deceased spouse’s IRA has some options with regard to taking distributions from the inherited IRA, options that are not available to other non-spousal beneficiaries of inherited IRAs. Background: I received a couple of inquiries in the past few weeks confirming the basic the options that […]

Take-Away: With the compressed income tax brackets faced by non-grantor trusts, along with the possible imposition of additional income tax surcharges of 5% and 3%, more irrevocable non-grantor  trust should be drafted to include the authority of the trustee to make charitable distributions. Background: For years now we have come to deal with the high […]

Take-Away: While a trustee’s investment in cryptocurrencies, like Bitcoins, is permissible under the Uniform Prudent Investment Rule, a trustee may want to ‘go real slow’ before holding cryptocurrencies in trust. Background: Cryptocurrencies, like Bitcoins, is are receiving significant attention these days in the press and in Congress as part of the infrastructure legislation. For good […]

Take-Away: A trustee may be exposed to removal and ordered to reimburse the trust for fees and legal expenses incurred in a trust decanting that went awry. Background: In the past we have covered Michigan’s two trust decanting statutes. MCL 700.7820a permits changes primarily to a trust’s administrative provisions. A limited opportunity also exists to […]

Take-Away: When we talk about valuing an individual’s interest in a business, the question often arises if there will be valuation discounts applied to that business interest. Existing buy-sell agreements may, or may not, indicate if a valuation discount is to be applied when an individual owner’s interest is the subject of a buyout. Background: […]

Take-Away: A recent Michigan Court of Appeals decision acts as a good reminder of how valuable a trust can be to prevent a commingling of a gift or an inheritance to avoid a family business falling into an ex-spouse’s hands. Had premarital stock owned by the husband, received from his father’s trust, continued to be […]