Take-Away:  Michigan’s common law was silent on how to fill a trustee vacancy. The Michigan Trust Code addresses that ‘gap’ by providing a series of default rules to fill a trustee vacancy. A well drafted trust should address how trustee vacancies should be filled, along with the procedure to follow to fill the vacancy. Background: […]

Take-Away: Some taxpayers who owe back federal income taxes may be eligible to pay those back taxes over a period of up to six years. Qualifying for that privilege, however, is not automatic, as a couple of taxpayers learned in a recent Tax Court Memo decision. Case: Strashny v Commissioner, No. 13836-19L, Tax Court Memo […]

Treasury just published the applicable federal rates of interest for July. Key interest rates used for valuations used in connection with some estate planning strategies follow: IRC 7520  (120% of the midterm) Rate, that is used to value some interests such as QPRTs, GRATs and other estate planning strategies, is 0.6%. Short-term Rate (less than […]

Take-Away:  Defined-value clauses are popular when a hard-to-value asset like real estate or a closely-held business interest is gifted or sold. By expressing the asset transferred using a specific dollar amount, the IRS is frustrated in its efforts to revalue the asset on audit and find a disguised gift. The successful use of a defined-value […]

Take-Away: The beneficiary of an irrevocable trust can be treated as the owner of that trust for income tax reporting purposes. This grantor trust classification for the beneficiary can produce some unique  advantages. Background: Grantor trusts are an important estate planning tool, but they can admittedly be confusing when applied in various settings. The benefit […]

Take-Away: One response to the SECURE Act’s 10-year distribution rule is to make an IRA payable to a charitable remainder unitrust (CRUT) which pays the non-charitable beneficiary over his/her lifetime, much like the old stretch IRA distribution rules, a/k/a a synthetic stretch. Designating a testamentary CRUT as the beneficiary of a decedent’s IRA can also […]

Take-Away: One response to the SECURE Act’s 10-year distribution rule is to make an IRA payable to a charitable remainder unitrust (CRUT) which pays the non-charitable beneficiary over his/her lifetime, much like the old stretch IRA distribution rules, a/k/a a synthetic stretch. Designating a testamentary CRUT as the beneficiary of a decedent’s IRA can also […]

Take-Away: Effective June 30, 2020, the SEC’s Best Interest Regulations will govern broker-dealers. These Regulations require a broker to ‘exercise reasonable diligence, care and skill when making recommendations to their client’, which includes ‘understanding the risks and rewards of their recommendation, as well as the inherent costs in those recommendations.’ Consequently, a broker must properly […]

Notice 2020-50. Background:  The CARES Act authorizes qualified individuals to receive favorable tax treatment with respect to distributions from eligible retirement plans that are coronavirus-related distributions. Such a distribution is not subject to the 10% early distribution excise tax [IRC 72(t)] or the 25% penalty for early distributions from a SIMPLE IRA [IRC 72(t)(6).] The […]

Take-Away: The Department of Treasury on April 9 added to the list of extensions to file tax returns and pay taxes, expanding the extension to include gift and estate tax returns. Source: Notice 2020-23 Background: This new Notice is intended to amplify prior Notice 2020-18 which was previously summarized. This Notice extends the time to […]