What is a charitable remainder trust?

Adam Keilen Estate Planning

A charitable remainder trust is an irrevocable trust that allows a donor to make a gift to a trust, then receive income from the trust during the donor’s lifetime. Upon the donor’s death, a trustee will distribute the assets to certain charities named in the trust. The key benefits to a charitable remainder trust are: Income tax deductions; The ability …

Estate Planning for Young Families

Adam Keilen Estate Planning

If you die without an estate plan, your loved ones may have to go through the probate court process, wasting time and money. In probate, you run the risk that the court’s decisions may not be consistent with your goals; rather, intestate succession (the process automatically applied when there is no trust or will) determines how your assets are distributed. …

Can a Trust own and manage my business?

Adam Keilen Estate Planning

Estate Planning and Probate: Wills, Trusts, & Estates.  Can a Trust own and manage my business? The short answer – yes, it can; however, there is more to it. Trusts can own businesses and manage them for the benefit of your heirs, but there are nuances to consider. S-Corp thoughts/considerations. For example, if your business is an S-Corp, you avoid …

What is an Irrevocable Life Insurance Trust (ILIT)?

Adam Keilen Estate Planning

The Goal of an ILIT is to Avoid Inclusion in the Insured’s Gross Estate: For a typical life insurance policy, the death benefit proceeds are includible in a decedent’s gross estate for estate tax purposes. IRC 2042. Further, in Michigan, the cash value of a life insurance policy is not protected during the insured’s lifetime from the insured’s creditors. MCR …

Should I get a trust?

Adam Keilen Estate Planning

Should I get a Trust? The short answer – it depends. There are several factors to consider; primarily, trusts help clients avoid probate (saving time and money), thereby privately distributing assets upon the grantor’s death. However, not everyone needs a trust. Consider the following factors: How much of your estate will bypass probate? One of the main advantages of a …

Decanting Statutes in Michigan

Adam Keilen Estate Planning

Decanting is the discretionary exercise of a fiduciary power to appoint assets in trust, meaning, under IRC 2652, to “effect an arrangement that although not a trust, has substantially the same effect as a trust.” “The paradigm of the activity is the trustee of trust 1, T1, is currently authorized by the trust instrument to distribute trust income and principal …

Estate Planning – Business Succession Planning for Family Enterprises

Adam Keilen Estate Planning

Startling Facts. Family run businesses make up a significant portion of the US Economy. Yet, merely 12% of family run businesses survive into the third generation. Thus, 88% of family run businesses fail at, or prior to, the third generation. One of the primary reasons for such failures is failing to groom a successor with a business succession plan, i.e., …

Amendment to 529 Educational Accounts

Adam Keilen Estate Planning

As of January 2, 2013, Public Act 552 of 2012 was signed and amends the law regarding asset exemptions, as they relate to creditors. The Act protects 529 plans from creditors; an interest in an educational trust account is exempt under a court judgment. MCL § 600.6023(1)(l)(iii). Michigan amended the previous statute and now provides additional protection subject to certain …

Uncapping – Transfer From Parent to Child

Adam Keilen Estate Planning

The Michigan legislature passed a new law that impacts the way Michigan residential property taxes are assessed. Proposal A went into effect in January, 1995, and limited the amount a parcel of real property could appreciate each year for tax purposes. Under this law, the appreciation was limited to 5% or the rate of inflation, whichever was less. The value …