Update: A couple of times in the past year a federal court case was summarized that deals with the gift of stock to a donor advised fund, Fairbain v. Fidelity Investments Charitable Gift Fund, a California federal District Court case. The dispute dealt with restrictions imposed on the donors’ transfer of stock to a donor […]

Take-Away: One of the conditions to enjoy tax-free distributions from Roth IRAs and Roth 401(k) accounts is that the distribution must satisfy a 5-year holding period to be a qualified, tax-free distribution. The failure to satisfy the 5-year holding period subjects the earnings on the distributed Roth funds to be taxed. Background: With the threat […]

Take-Away: While valuation discounts, e.g. lack of control, lack of marketability, can effectively reduce the value of assets for federal estate and gift tax purposes, those same valuation discounts can come back and haunt a decedent at the time of his or her death when it comes to valuing assets that create estate tax deductions, […]

Take-Away: The SECURE Act changed distributions for many successor beneficiaries, depending on when the designated beneficiary of the inherited IRA dies. As time passes, the new successor beneficiary distribution rules will apply to more individuals, perhaps subjecting them to an even shorter distribution period than the SECURE Act’s 10-year payout rule. Background: A successor beneficiary […]

Take-Away: Courts often struggle when it comes to the implied disinheritance of a child or grandchild under a Will or Trust. If an excluded individual falls within the scope of an issue, heir or descendant, it is wise to expressly name that person and expressly state that such person is not to take any distribution […]

Take-Away: A non-judicial settlement agreement cannot be used to terminate or modify the terms of a trust. The presence of a spendthrift provision in a trust might be sufficient, however, by itself, to preclude the use of a non-judicial settlement agreement. Background: The adoption of the Michigan Trust Code in 2010 brought with it the […]

Take-Away: The SECURE Act carved out five categories of designated beneficiaries who continue to be eligible to take required minimum distributions using their own life expectancy. One of the five categories of eligible designated beneficiaries is when the designated beneficiary is less than ten years younger than the deceased IRA owner. That category of eligible […]

Take-Away: A portability election is a powerful tool to avoid federal gift or estate taxes. The timing of the portability election is critical. Whether a decedent’s estate is taxable or not controls whether a ‘late’ portability election can be made. Caution: This missive is technical. Please don’t kill the messenger. Background: A portability election permits […]

Take-Away: While we are only now beginning to work with the SECURE Act’s changes and its new concept of the eligible designated beneficiary, there remains a lot of confusion which hopefully will be addressed in anticipated IRS Regulations. The confusion stems from the fact that under the pre-SECURE Act distribution rules there was never a […]

Take-Away: The Internal Revenue Code provides the exclusion of gains from the sale of a primary home from taxable income. This rule allows married sellers who file joint tax returns to exclude as much as $500,000 and a single filer to exclude up to $250,000 of gains on the sale of a primary residence. While […]