Take-Away: The IRS has yet to rule on whether the owner of an inherited IRA can transfer that IRA to a grantor trust established by the inheritor. Such a grantor trust might be a revocable grantor trust. Background: Under the grantor trust rules, the settlor of the trust, if he/she holds certain powers or interests, […]

The IRS released its interest rates for February, 2021. These rates will be used for intra-family loans, or perhaps the interest rate on a note given in an installment sale to a grantor trust. If the rate is used, then there will be no ‘deemed gift’ in the transaction. Short-term (0 to 3 years):           0.12% […]

Take-Away: Now would be a good time to fund existing irrevocable life insurance trusts due to the possible change in tax laws beginning in 2021 and to respond to the impact caused by the current low interest rate environment. Background: The need to increase federal revenues to address the growing federal deficit has been previously […]

Take-Away: A parent can nominate another to act as guardian for the parent’s minor child in either a Will or another writing, which is witnessed. The minor child, if age 14 or older, can initially object to the appointment of the nominee as their guardian, but in the end the probate judge has the last […]

Take-Away: Probably a wait-and-see approach to estate planning is inadvisable at the beginning of 2021. It is time to build flexibility into estate plans to address a rapidly changing environment for donors, settlors, and their beneficiaries. A New Planning Environment: With a new year comes a new government, and an unusual set of external circumstances […]

Take-Away: Trust Codes contain statutes of limitations that are intended to enable the expeditious administration of a trust by avoiding late-in-the-day trust challenges. It is difficult, however, to active those statutory statutes of limitations to eliminate future trust challenges. Background: Challenges to the validity of a trust in Michigan are limited by a statute of […]

Take-Away: The Michigan State Bar’s Probate and Estate Planning Council is once again prepared to support a Bill that would enable the transfer of title to a motor vehicle with a beneficiary designation. Background: For a few years now Bills have been introduced with Michigan’s Legislature to permit the transfer of title to a motor […]

Take-Away: With the current uncertainty with regard to the likelihood of new taxes, and the possible retroactive effect of new tax legislation, one way to mitigate the risks of a retroactive reduction in the federal gift tax exemption is with a net, net, lifetime gift agreement. Background: President Biden has proposed a dramatic decrease in […]

Take-Away: Michigan’s revocation-on-divorce statute revokes all provisions made for an ex-spouse and the ex-spouse’s relatives, in a wide variety of instruments created by a divorced individual, including a Will and Trust. A relative is one who is related to the ex-spouse by blood, adoption, or affinity. The affinity of the ex-spouse’s relative with the divorced […]

Take-Away: Towards the end of 2020 substantial gifts were made in anticipation of a change in the federal transfer tax laws with a change in administrations. Intra-family loans were made to exploit the low interest rate environment to shift wealth gift tax-free. 2021 may prove to be no different. A parent’s inclination to help a […]