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 […]

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 […]

Take-Away: Effective June 30, 2020, the SEC’s Best Interest Regulations will govern broker-dealers. These Regulations require a broker to ‘exercise reasonable diligence, care and skill when making recommendations to their client’, which includes ‘understanding the risks and rewards of their recommendation, as well as the inherent costs in those recommendations.’ Consequently, a broker must properly […]

Notice 2020-50. Background:  The CARES Act authorizes qualified individuals to receive favorable tax treatment with respect to distributions from eligible retirement plans that are coronavirus-related distributions. Such a distribution is not subject to the 10% early distribution excise tax [IRC 72(t)] or the 25% penalty for early distributions from a SIMPLE IRA [IRC 72(t)(6).] The […]

Take-Away: The Department of Treasury on April 9 added to the list of extensions to file tax returns and pay taxes, expanding the extension to include gift and estate tax returns. Source: Notice 2020-23 Background: This new Notice is intended to amplify prior Notice 2020-18 which was previously summarized. This Notice extends the time to […]

Take-Away: Undue influence does not have to be the result of an intentional act. Background: We normally think of undue influence as a situation where one individual intentionally imposes his/her will over another individual, which is often the case. However, undue influence can be achieved without an intentional act according to Michigan courts. Definition: Undue […]

Take-Away:  Roth IRA conversions options exist under the 2020 charitable giving option created under the CARES Act. While not for everyone, for those charitably inclined donors with large IRAs, this may be a good year in which  to consider a Roth IRA conversion. Background: The Cares Act, which passed on March 23, 2020, contains a provision […]

Take-Away: One court recently held that a deems advisable discretionary trust distribution standard permitted the trustee to require the production of the trust beneficiary’s business records. This standard is frequently used when an asset-protection discretionary trust is created for the trust beneficiary, as provided under Michigan’s Trust Code, the beneficiary does not possess any property […]