Take-Away: A Simplified Employee Pension IRA (SEP) and a Savings Incentive Match Plan for Employees IRA (SIMPLE) have similar features, but they also have different rules that are often confused. While they are technically qualified plans, they are subject to IRA tax rules, not the rules that  generally apply to other qualified plans like 401(k) […]

Take-Away: Given the size of its population and the number of its senior citizens, Florida’ relatively progressive legislature  often provides some helpful guidance on probate and estate planning laws that are designed to better protect its citizens. Unlike some states that aspire to be trust ‘havens’ to attract trust assets, Florida’s probate laws seem to […]

Take-Away: There may be several good reasons for IRA owners to seriously consider a Roth conversion in 2020. Each owner’s circumstances are unique, so this is not a ‘one-size-fits-all’ decision, but the possibility of a Roth IRA conversion, in whole or in part, warrants a discussion with IRA owners at this time. Why A Roth […]

Take-Away: Despite the waiver of required minimum distributions in 2020, an individual age 70 ½ and above can still make qualified charitable distributions from their IRA. Overview: A qualified charitable distribution (QCD) provides a great tax break. A QCD will satisfy the IRA owner’s required minimum distribution (RMD) for the year. The QCD will not […]

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 […]