Take-Away: A week or so ago a short summary of Bernie Sander’s proposed Bill, “For the 99.5 Percent Act” was provided. Some of its proposals are covered in a bit more depth. Background: The proposed “For the 99.5 Percent Act” is clearly an effort to eliminate many conventional estate planning strategies and principles that have […]

Take-Away: If Senator Bernie Sander’s proposed For the 99.5 Percent Act is adopted, the amount of an individual’s gift tax exemption drops to $1. 0 million, and grantor trusts created or funded after the Bill becomes law will be included in the grantor’s taxable estate. These changes will dramatically impact existing irrevocable life insurance trusts […]

Take-Away: If Senator Bernie Sander’s proposed For the 99.5 Percent Act is adopted, the amount of an individual’s gift tax exemption drops to $1. 0 million, and grantor trusts created or funded after the Bill becomes law will be included in the grantor’s taxable estate. These changes will dramatically impact existing irrevocable life insurance trusts […]

Take-Away: Many tax attributes that an individual accumulates during lifetime from certain assets or transactions end with the individual’s death. While the assets that created the income tax attribution are inherited by the deceased individual’s beneficiaries, the tax attributes that arise from those assets do not. Hence the need to plan to preserve tax attributes. […]

Take-Away: Just when we thought we were finally beginning to understand the SECURE Act, the IRS throws us a curve ball on the 10-year distribution rule. Summary: On April 9, 2021 the IRS issued Publication 590-B with regard to Distributions from Retirement Account Arrangements. In that Publication (page 12) the IRS provides an example which […]

Take-Away: A second home, or vacation home, is an excellent asset to transfer to a spousal lifetime access trust (SLAT). A vacation home normally consumes income rather than generates income. In addition, often the vacation home is an heirloom type of family asset with plenty of memories held by children and grandchildren, which makes it […]

Caution: This summary is pretty technical, but important for ILIT trustees. Take-Away: Due to a recent change in the tax law, newly issued cash value life insurance policies will probably have higher premiums, but that might ultimately result in fewer life insurance policies lapsing prior to the insured’s death. This recent change also is yet […]

Take-Away: The federal Employee Retirement Income Security Act [ERISA] contains an extremely broad exemption provision that over-rides conflicting state laws. One exception to this principle that ERISA preempts conflicting state laws is a state’s slayer statute. Background: A forfeiture provision under a state’s probate laws is often called a slayer statute. Michigan’s version of a […]

Take-Away: Despite the SECURE Act’s 10-year distribution rule for inherited IRAs, the beneficiary of a decedent’s traditional IRA must take the decedent’ required minimum distribution (RMD) if it was not taken prior to the decedent’s death. That taxable distribution is not part of the SECURE Act’s 10-year distribution option for RMDs. Background: There is some […]

Take-Away: No one knows what tax reform will ultimately look like later this year, but that is not a good reason to ignore some planning steps that can be taken now to mitigate the increase in taxes that can be expected from that tax reform. All planning steps embrace the use-it-or-lose-it principle. Background: In March, […]