Take-Away: While Michigan has two separate statutes that enable a trustee to decant trust assets to a second trust created by the trustee, not to be lost is that a trust instrument can include its own decanting authorization given to the trustee, without having to contend with some of the hurdles imposed by Michigan’s two […]

Take-Away: With many individuals losing their jobs due to COVID-19, adding to their personal problems is the impact of that loss of employment on any outstanding loans that they may have taken from their qualified retirement plan account . Their failure to repay the loan will result in a taxable deemed distribution. Background: As we […]

Take-Away: The State Bar’s Probate and Estate Planning Council is currently studying proposed legislation with regard to permitting silent trusts in Michigan. A trustee should think twice before accepting the appointment of a silent trust due to the increased risks associated with administering a silent trust. . Background: Some settlors want to restrict a beneficiary’s […]

Take-Away: If a settlor wishes to establish a silent trust it would be best to establish that trust in, and subject it to, the laws of Delaware. Background: While Michigan is currently taking a second look at the legal authorization to create a silent trust, which is inconsistent with the common law duty of a […]

Take-Away: As we approach the end of the calendar year, at a time when end-of-the-year gifts might play a more prominent role than in years past, a gift of a fractional interest in real estate with substantial valuation discounts should be considered by the donor. Background: As has been reported over the past 2 months […]

Take-Away: A Remainder Purchase Marital Trust (RPM Trust) is sometimes described as an alternative to a spousal lifetime access trust (SLAT) or a grantor retained annuity trust (GRAT.) Like a SLAT or a GRAT, an RPM Trust is a sophisticated estate planning technique that is intended to remove assets from the spouses’ taxable estates, with […]

Take-Away: Michigan’s Prudent Investor Rule requires that a trustee take into consideration the impact of inflation on the trust assets’ purchasing power. That fiduciary obligation can pose a problem for the trustee of an Irrevocable Life Insurance Trust (ILIT) which holds a life insurance policy that does not grow it’s death benefit over time. Background: […]

AFR Changes: The October, 2020 AFR interest rates and the IRC 7520 interest rate were released by the IRS yesterday. Short-term AFR Rate:     0.14% Mid-term AFR Rate:        0.38% Long-term AFR Rate:       1.12%  (that is up from 1.0% for September) IRC 7520 Rate:                  0.40%  (the rate used to value life estate and retained interests in CRATs, […]

Take-Away: Regardless who wins as the next US President, there is a strong likelihood that the rule that provides an income tax basis step-up on the owner’s death will be subject to change. Background: What do Joe Biden and Donald Trump have in common, besides both wanting to be elected President in 2020? They both […]

Take-Away: The Tax Court recently held that a donor’s gift of closely held appreciated stock to a donor advised fund was not a taxable redemption of the stock, thus sustaining the donor’s charitable income tax deduction. Reported Decision: Dickenson et ux. v Commissioner, No. 9526-19 Tax Court Memo 2020-128 (September 3, 2020) Facts: The donor […]