Take-Away: The SECURE Act’s new 10-year distribution requirement requires present value calculations to determine whether it is best to defer taking any distributions from an inherited IRA until the tenth year, or to take distributions each year from the inherited IRA, or in some other pattern. Background: The Tax Code essentially provides two different situations […]

Take-Away: While grantor trusts are popular in estate planning from a gift, estate, and GST perspective, non-grantor trusts are gaining popularity for a variety of income tax reasons. If the income tax rules are changed by Congress, the use of non-grantor trusts will gain even more attention, along with the possible use of multiple non-grantor […]

Take-Away: An inherited IRA cannot be rolled over to another inherited IRA. Background: We are accustomed to individuals making a 60-day rollover of their IRA to another IRA. [IRC 408(d)(3).] We normally caution those individuals against such a move since mistakes can lead to missing the 60-day deadline, in turn leading to a taxable distribution […]

Take-Away: As we learn more about the prospect of certain tax law changes, such as the dramatic curtailment of annual exclusion gifts and its inevitable impact on irrevocable life insurance trusts (ILITs), third-party premium financing arrangements through loans may become a more efficient way to maintain life insurance policies held in ILITs, providing liquidity to […]

Take-Away: The income tax deduction afforded to estates and trusts to escape the compressed income tax brackets these entities face is governed by the concept of distributable net income (DNI.) The estate or trust cannot claim this income tax deduction for more than the DNI that is available to the entity. Normally, capital gains are […]

Take-Away: It has been 18 months since the SECURE Act became law, but we still do not have any Regulations to provide official guidance as to what ithe Act means in many situations. There seems to be no master strategy to overcome the SECURE Act’s elimination of the stretch IRA, or what trust works best for […]

Take-Away: For those IRA owner who want to use a trust to protect their beneficiary’s inheritance from the beneficiary’s imprudence or the beneficiary’s creditor claims, and also avoid having to follow the SECURE Act’s mandatory 10-year liquidation rule, naming a charitable remainder trust (CRT) for that beneficiary may be a viable option to consider. Background: […]

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 […]