Take-Away:  There initially was some concern if an individual made a large lifetime gift using her or his available applicable exclusion amount, that could come back and haunt the grantor at the time of death if at that time the applicable exclusion amount was lower, either after 2025, or earlier if Congress reduces the applicable exclusion […]

Take-Away: An inherited IRA cannot be rolled over to another inherited IRA. Background: We are accustomed to individuals making a 60-day rollover of their IRA to another IRA. [IRC 408(d)(3).] We normally caution those individuals against such a move since mistakes can lead to missing the 60-day deadline, in turn leading to a taxable distribution […]

Take-Away: No-contest clauses are ubiquitous in trusts these days. The growing tendency to expand the scope of no-contest clauses could, however,  have a chilling effect on beneficiaries who may not be willing to assume a risk of forfeiture in order to hold a fiduciary to account or to ask for clarification of ambiguous trusts. Background: […]

Take-Away: With an increasing interest in individuals purchasing life insurance to provide estate liquidity with her applicable exemption schedule to drop by over 50% in the next four years, there is renewed interest in life insurance trusts. Those asked to serve as the ILIT trustee should think twice before accepting the position as trustee of […]

Take-Away: The direct gift of tuition is not classified as a gift. Accordingly, the payment of an individual’s tuition is neither treated as a taxable gift nor does it utilize the donor’s annual exclusion gift opportunity. Background: This is the time of year when parents and grandparents start to think about fall and the coming school […]

Take-Away: The direct payment of another individual’s medical expenses is not treated as a taxable gift. Unlike the direct payment of tuition, the direct payment of medical expenses is much more broadly defined. Background: As previously reported, the direct payment of another individual’s tuition obligation is not treated as a gift, and thus not subject to […]

Take-Away: The purchase of a qualified longevity annuity contract using an IRA’s assets is not a wise move just  to delay taking, or reducing,  required minimum distributions. Background: Several years ago Congress amended the Tax Code to permit the use of a portion of an IRA or 401(k) account to purchase a qualified longevity annuity contract. […]

Take-Away: With much of the tax reform being talked about in Congress this past spring and this summer, little has been said about the possible impact of some of the tax proposals on philanthropy. Some planning options may be curtailed, yet others will continue to exist, and may even present better tax-saving opportunities if income […]

Take-Away: As we await Congress’ return to session this fall and its annual task of establishing a budget for fiscal year 2021-2022, not only will income tax increases be on everyone’s mind, but also possible changes to the rules with regard to retirement plans, plan contributions,  and possibly the income tax deduction that is associated […]

Take-Away: As individuals start to seriously consider higher income taxes they may face in their retirement years, more attention is being given to Roth IRAs, Roth conversions, and ‘back-door’ Roth IRA conversions using after-tax contributions. In some circumstances, it might be possible to contribute substantial amounts to a Roth account each year using a  Roth […]