Take-Away: We have yet another favorable IRS Private Letter Ruling that authorizes a surviving spouse to move a deceased’s spouse’s IRA assets to her own IRA and escape immediate income taxation and accelerated required minimum distributions. Background: Generally if a decedent’s IRA proceeds pass through a 3rd party, like a probate estate, and then are […]

Take-Away: A bill has been filed in the House of Representatives that would permit individuals who receive Medicare benefits to contribute to a health savings account (HSA.) Quick Summary: Representative Ami Bera (D-California) has filed a bill called the “Health Savings for Seniors Act” that would amend the Internal Revenue Code [IRC 223(c)(2)(A)] to provide […]

Take-Away: The SECURE Act’s Proposed Regulations contemplate the flexibility to make changes to an irrevocable trust instrument after an IRA owner’s death in order to optimize required minimum distribution planning (RMDs) to the trust. How that flexibility is implement is the challenge. Background: The SECURE Act Proposed Regulations provide new guidance on how an irrevocable […]

Take-Away: Brussels IV addresses choice of laws and administrative rules that relate to property situated in European Union (EU) jurisdictions. Individuals who own assets located in the EU should seriously consider affirmatively electing to have U.S. state estate planning laws apply to those EU located assets. Background: Brussels IV is the common name applied to […]

Take-Away: The general rule is that the gain on the sale of a principal residence can be excluded from gross income up to $250,000. There is, however, a use condition to this exclusion from gross income that could reduce the amount of the exclusion. Background: When a homeowner sells their principal residence, some gain can […]

Take-Away: A trust provision that encourages divorce, or constrains marriage is invalid, albeit sometimes. Background: As has been previously covered, a trust in Michigan is valid so long as it’s terms do not violate the state’s public policy. “A trust may be created only to the extent its purposes are lawful, not contrary to public […]

Take-Away: A surviving spouse who is named as the designated beneficiary of their deceased spouse’s IRA has options to choose from when taking required minimum distributions. Background: Often overlooked is the option of a surviving spouse who is designated as the beneficiary of their deceased spouse’s IRA to delay taking required minimum distributions (RMDs.) Eligible […]

Take-Away: The SECURE Act’s Proposed Regulations create a potential trap that require the inheritor of an IRA to monitor concurrent life expectancies. Background: The SECURE Act’s Proposed Regulations impose a complex requirement that forces a designated beneficiary to monitor the decedent’s phantom life expectancy and their own life expectancy when it comes to calculating required […]

Take-Away: The SECURE Act’s Proposed Regulations provide a safe harbor when a trust is named as a retirement account beneficiary and one beneficiary holds a power of appointment over the trust assets. Background: Earlier missives have summarized some of the key changes that appear in the SECURE Act’s Proposed Regulations, including the surprise that if […]

Take-Away: The President’s (or Treasury’s) 2023 Budget proposal contains a provision that would require trusts to annually file financial statements and possibly disclose the trust beneficiaries. Background: Recall that a year ago some Senators, including Bernie Sanders, proposed the Sensible Taxation and Equity (STEP) Act. The STEP Act included provisions that required annual reporting by […]