Take-Away: The Tax Code’s string provisions often create unexpected federal estate tax exposure, cause assets that were transferred during the transferor’s lifetime to be included in the transferor’s taxable estate for federal estate tax calculation purposes. Fortunately, if the lifetime transfer was a bona fide sale, then none of the string provisions will apply to […]

Take-Away: The CARES Act gave taxpayers new opportunities for charitable giving for 2020, while the SECURE Act arguably curtailed a popular form of charitable giving. As individuals start thinking about their end-of-year charitable giving for the 2020 income taxes, these ‘new’ rules will need to be factored into their philanthropy. Background: We are now in […]

Take-Away: It is not clear if Michigan courts will recognize a common law cause of action for the tortious interference with an expected inheritance. While some earlier court decisions seem to have adopted this as a viable cause of action in Michigan, other Michigan court cases seem to avoid any official recognition of a claim […]

Take-Away: A surviving spouse has available under Michigan’s Estates and Protected Individuals Code (EPIC) the right to elect against his or her deceased spouse’s Will and take an elective share of the decedent-spouse’s probate estate. However, the Michigan statute that confers an elective right on the surviving spouse only extends to the deceased spouse’s probate […]

Take-Away: There are many similarities to the federal estate tax and the federal gift tax. However, one big difference is that the gift tax is tax inclusive while the estate tax is tax exclusive. The result is that a lifetime taxable gift is more tax efficient as opposed to waiting until death to transfer an […]

Take-Away: With current interest rates so low, there may be no better time than the present to create and fund a ‘zeroed-out’ grantor retained annuity trust (GRAT.) Background: A grantor retained annuity trust, or GRAT, is expressly authorized by the Tax Code. [IRC 2702.] IRC 2702 provides that, for purposes of determining whether the transfer […]

Take-Away: Some gifts made within three years of a donor’s death are ‘added back’ to the donor’s taxable estate. More to the point, if the donor’s lifetime gift is subject to a retained interest or power over the gifted asset, the full value of the gift is included in the deceased donor’s taxable estate at […]

Take-Away: While the current low interest rate environment is favorable for many estate planning strategies, the low IRC 7520 rate makes some charitable gifts less desirable than before because the income tax deduction for certain charitable gifts will be dramatically reduced. These low interest rates will impact charitable gift annuities and charitable remainder annuity trusts, […]

Take-Away: Like a grantor retained annuity trust (GRAT), a sale to an intentionally defective grantor trust (IDGT) also benefits from the current low interest rates. An IDGT functions differently than a GRAT, but it is an effective way to freeze the value of the Grantor’s estate for estate tax purposes. The GRAT’s annuity potentially brings […]

Take-Away: Many wealthy individuals grudgingly acknowledge that they should take advantage of today’s $11.85 million federal transfer tax exemption. However, they are reluctant to do so out of a fear that they may need access to those transferred assets sometime in the future. Estate planning strategies exist that can reassure those individuals that they can […]