Take-Away: Some states, but sadly not Michigan, protect an inherited IRA from the inheritor’s judgement creditors. Background: Because substantial wealth in our society is held in IRAs, the protection of those assets from creditor claims is critically important in estate planning. Both federal and state laws generally provide considerable protection to IRAs from judgment creditors […]

Take-Away: Each state applies its own public policy when it comes to whether a Trust’s provisions are enforceable void. Often this public policy analysis evolves into the arcane of whether a trust provision imposes an unenforceable condition or a legally enforceable limitation.  Background: The Michigan Trust Code requires that for a Trust to be valid, […]

Take-Away: Formula gifts and sales are growing in popularity with regard to hard-to-value assets. The formula is used to avoid the possibility of an imputed taxable gift after an IRS audit. While some formula gifts work, other formula transfers are viewed against public policy and consequently ignored. Background: With increasing frequency, individuals are using defined […]

Take-Away: The estate planning community seems to be preoccupied with encouraging  married couples to adopt spousal lifetime access trusts (SLATs). An alternate estate planning strategy that might also be considered by a married couple is the gift to a lifetime qualified terminable interest property (QTIP) Trust. Background: With the fear of a sudden reduction of […]

Take-Away: IRAs are exempt from creditor claims under Michigan’s exempt property statute. Unlike other states, Michigan’s statute is silent when it comes to protecting inherited IRAs. It is possible, though, that distributions from an inherited  IRA will also be exempt from creditor claims under Michigan’s statute. Background: As has been covered in the past, (admittedly […]

Take-Away: A grantor Retained Income Trust, or GRIT, is an infrequently used trust to remove an asset from the grantor’s taxable estate with a discounted value for the gift, which may still be useful albeit in limited situations. Background: A grantor retained income trust (GRIT) is an irrevocable trust where the settlor transfers assets to […]

Take-Away: One of the less popular strategies to ‘freeze’ an individual’s estate to avoid or minimize federal estate taxes is a preferred partnership freeze.  In order to achieve such a freeze,  the senior family member must navigate the qualified payment rule of IRC 2701 to avoid incurring an immediate federal gift tax. Background: A preferred […]

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: The incredible tax benefits that are associated with the sale of qualified small business stock would be substantially curtailed if the House Ways and Means Committee’s proposals becomes law under the HR 5376 bill. Background: We’ve covered qualified small business stock in the past, so what follows is a bit of a ‘refresher.’ The […]

Take-Away: In early September the Treasury and the IRS published its priority guidance for the next six months. One of those guidance topics have already become effective. Of some surprise are a handful of other estate planning topics that were not on the most current Priority Guidance that have appeared in early IRS Priority Guidances […]