Take-Away:  A hardship distribution from a qualified plan is not the same thing as a coronavirus-related distribution from a qualified plan. While there are some similarities, the requirements for each distribution is a bit different. This is probably also a timely reminder that there are no hardship distributions from an IRA; an IRA owner has […]

Take-Away: While highly regulated, split-dollar life insurance plans for key employees and executives are finding more creative approaches like loan split-dollar plans, which gained attention and  some notoriety, University of Michigan’s football coach Jim Harbaugh’s contract. Apparently a $8.05 million annual salary was not enough for Jim and he needs tax-free income in retirement. Background: […]

Take-Away: The IRS published its Final Regulations with regard to IRC 199A, the 20% qualified business income deduction for individuals. These Regulations go into effect on August 24, 2020. The IRS did not, however, alter its prior position that it will not apply the separate share rule to beneficiaries of a trust or an estate […]

Take-Away: The 2017 Tax Act provided new rules on who, when and how to report a sale of a life insurance policy. Less obvious is that these new rules can make part of the death benefit paid under a life insurance policy taxable when under the prior tax laws the death benefit paid would have […]

Take-Away: The IRS’s Final Regulations on Opportunity Zone Funds answered a few questions that estate planners had when a client dies owning such an investment. Unfortunately, not all the answers the IRS provided were what planners wanted to hear. In addition, a surprising number of transactions with respect to an opportunity zone fund investment will […]

Take-Away: The IRS issued Notice 2020-51, which was previously reported on, to extend the time to restore required minimum distributions taken earlier in 2020 to August 31, 2020. Other ‘rules’ regarding distributions from retirement plans were also covered in this Notice that were not as noteworthy as the ability to ‘restore’ a previously taken required […]

Take-Away: The ownership of an annuity in any manner other than by an individual can be very complicated. Multiple tax questions arise, without a lot of answers, if a trust owns a tax deferred annuity. In general, annuities are supposed to be owned by natural persons. A trust is not a natural person. Background: This […]

Take-Away: Like all fiduciaries, a trustee is subject to the prohibition on self-dealing. There are some statutory exceptions, such as being reimbursed from the trust estate, but in general a transaction where the trustee is interested is voidable by a trust beneficiary. Individual trustees are far more likely to run afoul of the self-dealing prohibitions […]

Take-Away: A trustee can resign either with notice to all trust beneficiaries and others interested in the trust, or with the approval of a probate court. Less commonly encountered is when a custodian resigns from sponsoring an IRA. Trustee Resignations: A trustee can resign at any time and for any reason, subject to a couple […]

Take-Away: In a recent Chief Counsel Memorandum the IRS concluded that a charitable remainder annuity trust ‘marketing scheme’ resulted in a sham trust and, therefore, would not provide the claimed tax results as promised. General Counsel Memorandum AM 2020-006, Released June 26, 2020 What was marketed was a purported charitable remainder annuity trust [IRC 664(d)(1)] […]