Take-Away: A bill has been filed in Congress to allow a penalty-free rollover of unused IRC 529 plan balances into a Roth IRA. Background: The bill, called the College Savings Recovery Act, would allow for special rollovers to Roth IRAs from long-term qualified tuition programs without any penalty. The bill has bipartisan sponsors [ Richard […]

Take-Away: There may still be time for individuals who took a coronavirus related distribution (CRDs) to repay the withdrawn funds to their retirement account. But time may be running out on this opportunity. Background: Congress you will recall  in 2020 passed the CARES Act. The CARES Act permitted qualified individuals who were affected by COVID […]

Take-Away: Planning for an individual’s disability, while preserving the eligibility for governmental benefits should include opening an ABLE account for the disabled individual. Background: In 2014 Congress adopted the Stephen Beck, Jr., Achieving a Better Life Experience Act of 2014 (the ABLE Act.) This Act added IRC 529A to the Tax Code. The Act provides […]

Take-away: The intentional use of an incomplete gift trust is becoming a topic to cover with individuals, particularly when asset protection trusts are a possibility, or the more sophisticated intentional non-grantor (ING) trust is considered to accumulate income, state income tax-free. Background: In recent months (or years) emphasis has been placed upon encouraging individuals to […]

Take-Away: An incomplete gift to a trust is often used as an intentional way to avoid paying a current gift tax. However, many different rules under the Tax Code are at play when a transfer is made, including the grantor trust rules, to reach this result. Various retained powers in the trust held by the […]

Take-Away: With inflation continuing to run rampant, we can expect large increases for 2023 retirement plan contributions. Background:  Due to several cost-of-living escalator provisions in the Tax Code, the limits on qualified retirement plan contributions will increase beginning in 2023 to reflect increases in the Consumer Price Index for All Urban Consumers (CPI-U.) The CPI increase […]

 Take-Away: It is important to address the potential for adoptions when class bequests are part of a Will or a Trust, and in particular, how adult adoptions will be treated under the governing instrument. Background: Many trust instruments contain a definition of a descendant or heir,  and address the possibility that an individual will be […]

Take-Away: When a co-trustee also is a trust beneficiary, actions taken by the co-trustee/beneficiary against the other co-trustee may not constitute a breach of trust. Background: A breach of trust is defined under the Michigan Trust Code as ‘a violation of a duty the trustee owes to a trust beneficiary.’ [MCL 700.7901(1).] Several duties are […]

Take-Away: Lifetime transfers that are includible in the transferor’s taxable estate at death will not be protected from the fear of double taxation, such as GRATs and QPRTs.   Background: We have dealt with this topic before (sadly). The 2017 Tax Act increased a transferor’s basic exclusion amount (BEA) that is sheltered from federal transfer […]

Take-Away: The recent Proposed Regulations identify situations where the use of a donor’s large applicable exemption amount may create estate tax problems in the future at the time of the donor’s death. Background:  After the 2017 Tax Act and its Final Regulations, we all assumed that gifts that were made while the applicable exemption amount […]