Take-Away: Most retirement accounts are protected from creditors or in a bankruptcy proceeding. Note the use of the word most. As with almost all of the retirement planning, there are multiple rules that apply to different types of retirement plans, including federal rules (ERISA), federal bankruptcy rules, and state-specific creditor protection exemption rules. As a […]

Take-Away: The SECURE Act created an exception to the 10% penalty otherwise imposed on a distribution from a retirement account for expenses that are incurred in a birth or an adoption. The IRS just issued guidance on how these new rules will be interpreted and enforced. Background: The SECURE Act added another exception to the […]

Take-Away: Normally a trustee can make loans to trust beneficiaries, but caution needs to be exercised before the trustee makes the loan. Background: Last week a trust relationship officer asked if the trustee could honor a beneficiary’s request for a loan from an irrevocable trust when the trust powers were silent on making loans. In […]

Take-Away: As we approach the last calendar quarter of 2020 and individuals begin to think about their final 2020 income tax liability, adjustments may be made to their elective contributions to their employer’s 401(k) plan to reduce their reportable taxable income for the year. However, they often forget that there are compensation limits imposed by […]

Take-Away: The Tax Code’s string provisions often create unexpected federal estate tax exposure, cause assets that were transferred during the transferor’s lifetime to be included in the transferor’s taxable estate for federal estate tax calculation purposes. Fortunately, if the lifetime transfer was a bona fide sale, then none of the string provisions will apply to […]

Take-Away: The CARES Act gave taxpayers new opportunities for charitable giving for 2020, while the SECURE Act arguably curtailed a popular form of charitable giving. As individuals start thinking about their end-of-year charitable giving for the 2020 income taxes, these ‘new’ rules will need to be factored into their philanthropy. Background: We are now in […]

Take-Away: It is not clear if Michigan courts will recognize a common law cause of action for the tortious interference with an expected inheritance. While some earlier court decisions seem to have adopted this as a viable cause of action in Michigan, other Michigan court cases seem to avoid any official recognition of a claim […]

Take-Away: A surviving spouse has available under Michigan’s Estates and Protected Individuals Code (EPIC) the right to elect against his or her deceased spouse’s Will and take an elective share of the decedent-spouse’s probate estate. However, the Michigan statute that confers an elective right on the surviving spouse only extends to the deceased spouse’s probate […]

Take-Away: There are many similarities to the federal estate tax and the federal gift tax. However, one big difference is that the gift tax is tax inclusive while the estate tax is tax exclusive. The result is that a lifetime taxable gift is more tax efficient as opposed to waiting until death to transfer an […]

Take-Away: With current interest rates so low, there may be no better time than the present to create and fund a ‘zeroed-out’ grantor retained annuity trust (GRAT.) Background: A grantor retained annuity trust, or GRAT, is expressly authorized by the Tax Code. [IRC 2702.] IRC 2702 provides that, for purposes of determining whether the transfer […]