Take-Away: As many married couples are currently encouraged to adopt spousal lifetime access trusts (SLATs) in order to use their applicable excluion amounts before those exclusions are reduced, either by Congress, or in 2026 when the large exclusion amounts are scheduled to sunset, they need to be warned about the reciprocal trust doctrine, which can destroy […]

Take-Away: The dividends an employee-shareholder receives from a C corporation will be subject to the net investment income tax. IRS Chief Counsel Advisory: Earlier this year the IRS published Chief Counsel Advisory 2021009 (dated January 4, 2021, and released on May 7, 2021) that determined that dividend income that is received by an individual shareholder […]

Take-Away: The Michigan Court of Appeals recently held that the terms of the spouses’ divorce Property Settlement Agreement will override the terms of the Michigan Trust Code. Reported Decision: Johnson v. Shaffer, (In re Gerald F. Johnson Revocable Trust), No. 351134, Unpublished, 2021 Mich App. LEXIS 3732 (June 17, 2021) Facts: In 2008 Gerald and […]

Take-Away: A recent Bankruptcy Court decision added more confusion to whether an inherited 401(k) account is protected if the inheritor files for bankruptcy Background: I have regularly complained (probably to anyone who will listen to me) that the current tax code and its Regulations with regard to contributions to and distributions from the various types […]

Take-Away: A bill has been filed in Congress that would make significant changes, both good and bad, to the qualified business income tax deduction under IRC 199A. Anything that would make this tax deduction easier to understand and implemented would be welcome. Background: IRC 199A generally allows business owners of pass-through entities, like LLCs, to […]

Take-Away: A recent study with regard to Michigan donor advised funds might provide additional support for a Congressional change to require faster distributions from donor advised funds. Background: A recent missive referenced a bill currently before Congress to  accelerate distributions from donor advised funds (DAFs.) That bill, co-sponsored by Senator King (Independent, Maine) and Senator Grassley […]

Take-Away: With Medicare and Medicaid benefits now comprising a large part of each state’s annual budgets, many states are now passing laws in an attempt to curb eligibility to receive Medicaid benefits. Some of those state laws seem often seem to go a bit ‘too far.’ Background: It is no secret that Medicaid has become a […]

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: […]