Take-Away: One of the less popular strategies to ‘freeze’ an individual’s estate to avoid or minimize federal estate taxes is a preferred partnership freeze.  In order to achieve such a freeze,  the senior family member must navigate the qualified payment rule of IRC 2701 to avoid incurring an immediate federal gift tax. Background: A preferred […]

Take-Away: With the ‘trimmed down’ $1.75 trillion Build Back Better Framework proposed legislation, some of the earlier tax law changes have disappeared, to be replaced by new proposals. (Did I just written a ‘trimmed down’ $1.75 trillion?) Background:  On October 29, 2021, the President announced a $1.75 trillion Build Back Better Framework Act. In order to […]

Take-Away: The incredible tax benefits that are associated with the sale of qualified small business stock would be substantially curtailed if the House Ways and Means Committee’s proposals becomes law under the HR 5376 bill. Background: We’ve covered qualified small business stock in the past, so what follows is a bit of a ‘refresher.’ The […]

Take-Away: In early September the Treasury and the IRS published its priority guidance for the next six months. One of those guidance topics have already become effective. Of some surprise are a handful of other estate planning topics that were not on the most current Priority Guidance that have appeared in early IRS Priority Guidances […]

Take-Away: With the high taxation of income accumulated in an irrevocable Trust, and the current threat of even higher income taxes faced by irrevocable Trusts, a Trust may need to have included in the Trust instrument as a ‘safety valve’ the trustee’s ability to make charitable gifts. Consider naming a donor advised fund as a […]

Take-Away: The House Ways and Means Committee has proposed the elimination of valuation discounts for non-business assets held in an entity. If this proposal becomes law, it could wreck-havoc with existing buy-sell agreements and possibly cause unanticipated taxable transfers. Background: The House Ways and Means Committee proposes to eliminate valuation discounts for non-business assets held […]

Take-Away: Beginning in 2022 there will be new life expectancy tables used To calculate required minimum distributions (RMDs.) In order to avoid the 50% penalty for failing to take the full RMD, it is important to use the correct Life Expectancy Table. Background: In November 2020 the IRS released new life expectancy tables to be used […]

Take-Away: More trusts, especially those that will continue for several years as a discretionary trust, should contain a material purpose clause to guide the trustee in the trust’s administration and a probate judge when called upon to modify the terms of the trust, or terminate the trust. Background: The Michigan Trust Code makes frequent reference […]

Take-Away: Michigan’s Probate and Estate Planning Council is currently studying a recommendation to change the Michigan Trust Code to permit silent or quiet trusts. If that proposal becomes the law, silent trusts should nonetheless be used sparingly. Background: The common law imposes on trustees the fiduciary duty to report and account to trust beneficiaries in […]

Take-Away: In Michigan a trust protector, called a trust director, serves in a fiduciary capacity. It is possible that the trust director’s amendment to a trust might, despite those fiduciary duties,  be voidable due to undue influence. Background: The Michigan Bar’s Probate and Estate Planning Section is currently studying an update in the definition and […]