Take-Away: A couple of recent Michigan Court of Appeals decisions suggest that a prenuptial agreement that seeks to protect one spouse’s separate property might still be a viable estate planning tool, despite some earlier questions raised by the Michigan Supreme Court in its Allard decision to the contrary. While a prenuptial agreement can protect separate […]

Take-Away: If many of President-elect Biden’s proposed tax law changes are implemented in the next few years, they will have a dramatic impact on how individuals engage in philanthropy. Some of the proposed changes will create more challenges to implement philanthropy, while other existing opportunities will still be available and might even be enhanced. Background: […]

Take-Away: Congress surprised us and reversed the IRS’s initial position that while PPP loans used to pay business expenses that are reimbursed under the CARES Act will be forgiven, those business expenses are not tax deductible. That all changed with the recent Consolidated Appropriations Act. Source: Revenue Ruling 2021-2 Background: In IRS Notice 2020-21 (May […]

Take-Away: With the Democrats now clearly in control of the federal government, we can expect a lot of discussion, and probably some action, with modifications to the federal income and transfer tax laws. President-elect Biden has promised more income taxes and a lower federal exemptions from transfer taxes. Exactly when they arrive, and in what […]

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 […]