Take-Away: The IRS recently published a new Revenue Ruling that affects the income tax basis of a life insurance policy. That change will have a positive impact on a life-settlement sale of a life insurance policy. The change may also have a modest impact on the amount of gain recognized if the death benefit received […]

Take-Away: A trustee is charged with marshalling assets that are held, or supposed to be held, in a trust. If the trustee decides not to pursue assets to bring them into the trust, or to pursue claims the trust might have against third-parties, the real-party-in-interest doctrine normally says that only the trustee possesses the claim, […]

Take-Away: Today the Michigan Court of Appeals released an interesting case where the decedent’s Will and Trust were found to be forgeries by the named trustees. The probate court was asked to enter a damage award against the perpetrators for treble damages as authorized by Michigan’s conversion statute, but the probate court denied that request. […]

Take-Away: The State of Washington Supreme Court held that a spouse who had entered into a separation agreement in anticipation of a divorce waived her intestate succession rights when her husband died before their divorce was final. That result might not be the same in Michigan, in light of an unpublished Court of Appeals decision. […]

Take-Away: If an individual possesses and incident of ownership in life insurance at the time of his/her death, the full death benefit will be included in the individual’s taxable estate for federal estate taxation. Incident of ownership is more than just owning the life insurance on one’s life. Background: Death benefits owned by the insured  […]

Take-Away: Creditors sometimes seek to set aside transfers by a settlor to an irrevocable trust claiming that the transfer of assets to the trust is a fraudulent conveyance. Courts have on occasion resorted to a couple of equitable remedies called either (i) the trust is the alter ego of the settlor, or (ii) the veil […]

All of us have a fairly comfortable with our working knowledge of IRA distribution rules and rollovers from IRA accounts. But sometimes that familiarity with the basic distribution rules can cause us to become a bit too complacent and make assumptions that are not always accurate. Complying with these rules is critical since the penalty […]

Did you know that the federal estate tax is celebrating its 100th anniversary in September? Yes, the dreaded death tax will celebrate its centennial on September 8. The estate tax was enacted on the heels of the first federal income tax. The estate tax was intended to create an additional revenue source as the United […]

Take-Away: Late last week, in response to the pandemic, the Department of Treasury released two Notices that gave taxpayer’s relief in filing their income tax returns for 2019. However, it appears that relief does not extend to the filing of federal gift tax returns or federal estate tax returns. Background: The Tax Code gives the […]

Take-Away: The CARES Act just passed by Congress enables individuals to access their retirement accounts as a financial resource in this time of crisis. Summary: A handful of the CARE Act provisions deal with the use of retirement accounts as a financial resource. A short summary of those provisions follow. Section 2202- Waiver of 10% […]