Take-Away: An estate tax apportionment clause is an important provision in a Will or Trust when there is a second marriage, children with different parents, or an extensive use of non-probate transfers techniques like ladybird deeds, TODs, PODs, and IRAs. Without careful allocation of federal and state estate taxes associated with these beneficiaries and non-probate […]

Take-Away: While an estate’s personal representative must now report to the IRS and estate beneficiaries date-of-death values for basis consistency purposes, it does not make much sense to report the value of an IRA account which has no basis. Apparently, however,  that is required under the IRS’s proposed Regulations for its new basis consistency reporting […]

Take-Away: We are all familiar with the 10% penalty that is assessed when funds are withdrawn from an IRA or qualified retirement plan account when the IRA owner or plan participant is under the age 59 ½ years.  The good news is that there are some exceptions to the imposition of this 10% penalty. The […]

Take-Away: As you have repeatedly heard from me over the last year, there has been a fundamental shift in estate planning from minimizing federal estate taxes to minimizing federal income taxes. While clients want to continue to make lifetime gifts for a variety of reasons, it is helpful to keep the income tax consequences of […]

Take-Away: Many trust instruments these days, especially dynasty-type trusts, use a pot trust approach in order to give the trustee considerable latitude to spread taxable income generated by the trust over several trust beneficiaries who may be in low, or no, income tax brackets. Along with the flexibility that comes with a pot trust are […]

Take-Away: To describe Michigan’s real property tax rules as complicated is a gross understatement. The key To navigate the uncapping rules in search of an exception is to go slow (to the point of moving your lips while you read the key definitions) in order to avoid a taxable value uncapping when title transfers to […]

Take-Away: In response to the devastation caused by Hurricane Harvey, the IRS revised many of its rules to make it easier for victims who live in a large part of Texas to access their retirement assets. Loans and Hardship Withdrawals: The relaxed rules apply to plan loans and hardship distributions. You will recall however that […]

Take-Away:  As a client reaches age 70 and faces the obligation to take required minimum distributions (RMDs),  these rules are bewildering, which can lead to some traps that cause penalties, or they can offer a creative way to defer reporting the RMD as additional taxable income with the still working exception to the RMD rules. […]

Take-Away: Michigan’s version of the Uniform Principal and Income Act (UPAIA or Act) [recently renamed the Fiduciary Principal and Income Act] gives a Trustee the authority to classify principal as income in order to treat all trust beneficiaries (life and remainder) impartially and invest trust assets for a total return. This authority is critical to […]

Take-Away: Greenleaf Trust may be named as successor trustee of a Trust instrument that it learns about only after the settlor has died. Greenleaf Trust can take some steps with respect to the Trust and its assets without a formal acceptance of the Trust. The unanswered question, however,  is just how far Greenleaf Trust can […]