Take-Away: The IRS issued a Revised 2020 Publication 590-B  that clarifies that the beneficiary of an inherited traditional IRA has the option to withhold taking distributions from that IRA until December 31 of the 10th anniversary of the IRA owner’s death. Background: When the initial 2020 Publication was issued earlier this year it created a […]

Take-Away: There are 5 different situations in which an irrevocable trust is exempt from the 40% generation skipping transfer tax. The efficient use of that $11.7 million GST exemption is critically important. Background: With many individuals presently exploring the use of gifts to use their applicable exemption amounts (while they still exist at such high […]

Take-Away: A trust can be decanted pursuant to Michigan’s two decanting statutes. However a trust instrument can have its own built-in decanting provision. Background: As we have covered in the past, in 2012 Michigan adopted two separate trust decanting statutes that give to the trustee the authority to decant trust assets to a new trust. […]

Take-Away: While the concept of spouses making split-gifts sounds simple, there are many conditions that must be satisfied, along with several ‘traps’ when a lifetime gift is split. Gift splitting can also provide a couple of planning opportunities when it comes to avoiding the generation skipping transfer (GST) tax. Background: With so much attention currently […]

Take-Away: There is currently a Bill in Congress that would liberalize some of the changes to retirement plan distributions that started with 2019 SECURE Act. The Bill came out of the House Ways and Means Committee in May with allegedly bipartisan support. Background: There is a Bill pending in Congress called the Securing a Strong […]

Take-Away: Using the federal unified credit to pay the federal gift tax due on a transfer is not the same thing as paying the gift tax, according to a recent Michigan Court of Appeals decision. Background: Probate courts are often asked to interpret or construe the terms of a trust instrument. However, asking a court […]

Take-Away: Senator Bernie Sanders (Vermont), along with Senator Whitehouse (Rhode Island) filed a Bill on March 25 that would dramatically overhaul the nation’s tax laws and close what many describe as estate planning ‘loopholes.’ Background: Last year while on the campaign trail, Senator Sanders introduced a Bill called “For the 99 Percent Act.” This year’s […]

Take-Away: In something of a surprise, the IRS has never provided any direct advice on the tax consequences resulting from the division of a Roth IRA in a divorce. The best analogy for guidance is when a spouse inherits a deceased spouse’s Roth IRA. Background: There is a distinct lack of guidance with regard to […]

Take-Away: Last week Bernie’s Sander’s (Vermont) proposed a Bill, “For the 99.5 Percent Act.” This week (March 29) we have Senator Chris Van Hollen’s (Maryland) proposed Bill “Sensible Taxation and Equity Promotion Act of 2021.” Senator Van Hollen’s Bill would have an effective date of January 1, 2021. Summary: Senator Van Hollen’s Bill would make […]

Take-Away: It pays to use definitions in Wills and Trusts, especially when using words like spouse. Background: Some Wills and most Trusts are too long in the eyes of the testator or settlor. When the instrument of transfer contains several paragraphs of definitions, that only adds to the document’s length, and the frustration of the […]