Take-Away:  While charitable deductions that cannot be used in one year can be carried over for another 5 years, there is one ‘trap’ where that will not be the case. Background: The Tax Code permits a carryover of the income tax deduction with regard to excess charitable gifts. That carryover is up to the next […]

Take-Away: The IRS published today the applicable federal rates (AFRs) and the IRC 7520 rate for  transactions occurring in December, 2020. Short-term Rate (less than 3 years):                         0.15% Mid-term Rate (between 3 and 9 years):                 0.48% Long-term Rate (longer than 8 years, 11 months) 1.31% (up from this month’s 1.17%)  The IRC 7520 rate used […]

Take-Away: A no-contest, forfeiture, or in terrorem, clause in a Will or Trust will be enforced in Michigan, unless the challenger possesses probable cause to challenge the validity of the Will or Trust. As a broad generalization, courts are reluctant to enforce a no-contest clause. Background: A no-contest clause provides that any beneficiary who contests […]

Take-Away: While Michigan has two separate statutes that enable a trustee to decant trust assets to a second trust created by the trustee, not to be lost is that a trust instrument can include its own decanting authorization given to the trustee, without having to contend with some of the hurdles imposed by Michigan’s two […]

Take-Away: With many individuals losing their jobs due to COVID-19, adding to their personal problems is the impact of that loss of employment on any outstanding loans that they may have taken from their qualified retirement plan account . Their failure to repay the loan will result in a taxable deemed distribution. Background: As we […]

Take-Away: The State Bar’s Probate and Estate Planning Council is currently studying proposed legislation with regard to permitting silent trusts in Michigan. A trustee should think twice before accepting the appointment of a silent trust due to the increased risks associated with administering a silent trust. . Background: Some settlors want to restrict a beneficiary’s […]

Take-Away: If a settlor wishes to establish a silent trust it would be best to establish that trust in, and subject it to, the laws of Delaware. Background: While Michigan is currently taking a second look at the legal authorization to create a silent trust, which is inconsistent with the common law duty of a […]

Take-Away: As we approach the end of the calendar year, at a time when end-of-the-year gifts might play a more prominent role than in years past, a gift of a fractional interest in real estate with substantial valuation discounts should be considered by the donor. Background: As has been reported over the past 2 months […]

Take-Away: A Remainder Purchase Marital Trust (RPM Trust) is sometimes described as an alternative to a spousal lifetime access trust (SLAT) or a grantor retained annuity trust (GRAT.) Like a SLAT or a GRAT, an RPM Trust is a sophisticated estate planning technique that is intended to remove assets from the spouses’ taxable estates, with […]

Take-Away: Michigan’s Prudent Investor Rule requires that a trustee take into consideration the impact of inflation on the trust assets’ purchasing power. That fiduciary obligation can pose a problem for the trustee of an Irrevocable Life Insurance Trust (ILIT) which holds a life insurance policy that does not grow it’s death benefit over time. Background: […]