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 […]

Take-Away: We expect the House’s Ways and Means Committee to release its tax law proposals sometime next week. While most taxpayers are looking for a potential increase in the long-term capital gains tax rate, there may be other tax increases in the proposed bill in Congress’ endless search for revenues. Background: Earlier this year the […]

Take-Away: Wills and Trusts often refer to per stirpes to describe a class gift to descendants. As a surprise to many, the concept of per stirpes is not the same under the governing laws of each state, which can lead to much confusion when the Will or Trust is construed with regard to the members of […]

Take-Away: Each state has its own rules when it comes to the enforcement of a ‘no-contest’ clause. Michigan follows the general rule that a ‘no-contest’ provision will be enforced unless the challenger possesses probable cause to institute the challenge. Other states follow different rules, some more stringent, others more lenient. A state like Florida refuses […]

Take-Away: There are rumors coming out of Washington D.C. that one of the possible sources of new revenue  as part of the upcoming 2022 budget that Congress is about to debate is a forced lump sum distribution if a retirement account balance exceeds a specific dollar amount. Rumor: The rumor is that if an IRA or […]

Take-Away: Real estate can be held in an IRA, but navigating  the Tax Code’s self-dealing rules almost make it not worth the effort  to hold real estate in an IRA. Background: Over the weekend I was talking with a fellow who plans to purchase a Traverse City downtown condo using his IRA. Suffice it to […]