Inheriting an IRA: The Ten-Year Rule and What It Means for Taxes

Inheriting an IRA can feel like a windfall, but the tax rules are unlike those for any other inheritance. Every withdrawal from an inherited traditional IRA is ordinary income; inherited Roth distributions are tax free once the account has been open five years. There is no early distribution penalty at any age.

Most non spouse beneficiaries of owners who died after 2019 must empty the account by the end of the tenth year after death, and under the 2024 final regulations, if the owner had already reached his required beginning date, the beneficiary must also take annual distributions in years one through nine. Surviving spouses, minor children until 21, disabled or chronically ill beneficiaries and those within ten years of the owner's age can still stretch. The pace of withdrawals is the whole game: spread them, watch state tax, coordinate with any trust, and do not miss the annual amounts, because the 25 percent excise tax applies to inherited accounts too.

The full piece is at turnipseed.law.

Portability Still Matters, Even With a $15 Million Exemption

With the exemption now a permanent $15 million per person, some families have concluded that portability no longer matters. For many of them that is wrong. Portability lets a surviving spouse add the deceased spouse's unused exclusion to her own, but only if the executor files a Form 706 and makes the election, even when the estate owes nothing. For an estate not otherwise required to file, the Service allows a late election within five years of death without a ruling or fee.

It still matters because the survivor's estate grows, because life insurance and retirement accounts make modest estates large, because the unused amount can be used for lifetime gifts ahead of the survivor's own exemption, and because remarriage can forfeit it. It does not carry the GST exemption, which is why dynasty minded families still fund a trust at the first death. For a surviving spouse within five years of the first death whose estate filed nothing, the advice is simple: file the return.

The full piece is at turnipseed.law.

Washington's Capital Gains Tax Asks Who Recognizes the Gain

Brent Sullivan at Tax Alpha Insider flagged a counterintuitive wrinkle: in Washington a long term capital loss can be worth more than a short term loss, because the state's capital gains tax applies only to long term gains. The tax is 7 percent above an indexed standard deduction, with an additional 2.9 percent on gains above $1 million beginning in 2025, and only individuals pay it, though gains of grantor trusts and incomplete gift trusts are attributed to the settlor.

Loss harvesting asks how to offset a gain. The bigger question for a client with concentrated stock, founder shares or a coming liquidity event is whether the client should be the person recognizing the gain at all. A completed gift South Dakota nongrantor trust funded before the sale, a charitable remainder unitrust, a South Dakota community property trust for basis planning, and other state tax sensitive structures each answer that question differently. None is a last minute fix. The answer is not to harvest more losses but to build a better structure.

The full piece is at turnipseed.law.

The Missed RMD: Easy to Overlook, Expensive to Ignore

Required minimum distributions look simple until something goes wrong: a missed deadline, the wrong amount, uncoordinated accounts or a beneficiary who misreads the rules for an inherited IRA. I was quoted on this in Parade and MSN in May 2026, and the questions those reporters asked are the ones families should ask before year end.

Distributions begin at 73, and the first can be delayed to April 1 of the following year. IRAs can be aggregated, employer plans cannot, and inherited accounts stand alone. A missed amount carries a 25 percent excise tax, reduced to 10 percent if corrected within the correction window and waivable for reasonable error on Form 5329. An owner over 70 and a half can send up to $111,000 in 2026 directly to charity, excluded from income and counted toward the distribution. The fix is coordination among the custodian, the preparer, the advisor and any trustee in the fall, not a discovery in April.

The full piece is at turnipseed.law.

From Tax-Loss Harvesting to a Charitable Remainder Unitrust

Direct indexing, tax loss harvesting and long short tax aware accounts can generate losses that offset gains on a concentrated position. They are useful, but they manage the timing of tax rather than change the economics, and they bring fees, leverage, tracking error and the wash sale rules. For the right client, a charitable remainder unitrust does change the economics.

The donor contributes appreciated assets to an irrevocable trust that pays a fixed percentage of its value each year for life or a term, with the remainder to charity. The trust is exempt from tax, so it can sell and diversify without a current capital gains tax, and the donor is taxed only as payments arrive, largely at capital gain rates. The donor also receives a current deduction for the actuarial value of the remainder, removes the assets from the estate and leaves a charitable legacy. It suits owners approaching a sale, retirees with low basis stock and charitably inclined families; it does not suit anyone without real charitable intent.

The full piece is at turnipseed.law.

Helping a Child Buy a Home Without a Gift Tax Surprise

Parents are helping adult children buy homes with down payments, co-signatures, family loans and outright purchases. Each has a different gift tax result, and the issue gets less attention than it deserves. Cash for a down payment or a house bought for a child is a gift; with a $15 million exemption that rarely means tax, but above the annual exclusion it means a Form 709. A co-signature is generally not a gift unless the parent pays.

Each parent can give $19,000 a year to each child, so married parents can give $38,000, and another $38,000 to the child's spouse. Larger amounts can be lent under a written note at the applicable federal rate, with interest actually paid, and principal can be forgiven in later years as a genuine yearly decision rather than a plan fixed at the outset, which the Service treats as a gift of the whole. And because a gifted house carries the parent's basis while gifted cash does not, the form of the help matters for income tax too.

The full piece is at turnipseed.law.

QSBS Stacking Trusts: Powerful, but Not a Free-for-All

In May 2026 Treasury's assistant secretary for tax policy told practitioners that the department does not like multiplying the qualified small business stock exclusion through stacks of trusts. My take: this is not a reason to stop planning. It is a reason to plan carefully.

Section 1202 excludes up to the greater of $15 million or ten times basis per taxpayer per issuer for stock issued after July 4, 2025, and a trust that is a separate taxpayer has its own cap, with gifted stock keeping its character and holding period. That is the legitimate core. What drew the warning were trusts for child A, child B and child C plus trusts for AB and BC, structures that exist only to multiply the benefit and that section 643(f) and section 1202(k) give the Service tools to attack. The right version uses separate nongrantor trusts with distinct beneficiaries and real purposes, funded early at low value and administered independently. The best tax planning is the version that still works when someone asks hard questions later.

The full piece is at turnipseed.law.

Distributing All the Income No Longer Clears the Trust's Tax Bill

For decades a nongrantor trust that distributed all of its distributable net income could stop worrying about its own income tax. The Joint Committee on Taxation's explanation of the 2025 tax law puts that assumption in doubt. The new section 68 trims two thirty sevenths of a top bracket taxpayer's itemized deductions, the provision that excluded trusts was repealed, and a footnote in the Blue Book treats the trust's distribution deduction as an itemized deduction subject to the haircut.

The arithmetic: $100 of trust income fully distributed, about $5.41 of the deduction disallowed, about $2 of tax at the trust, $37 at the beneficiary, roughly 39 percent combined before the net investment income tax and state tax. The reading is contested, because it taxes part of the income twice and conflicts with the conduit principle of Subchapter J, and Treasury has not ruled. Until it does, trustees should revisit bracket planning, distribution timing, grantor versus nongrantor status and state tax exposure.

The full piece is at turnipseed.law.

The $15 Million Exemption Is a Launchpad, Not a Parking Space

The federal gift, estate and GST exemption is $15 million per person for 2026, indexed and now permanent. Most of the conversation asks how to give it away. The better question is how to move wealth into a structure that keeps working for the family for generations.

Give the right asset rather than cash, so discounted nonvoting interests and appreciating property move more wealth per dollar of exemption. Pair a gift with an installment sale to a grantor trust where the facts support leverage. Let the settlor pay the trust's income tax, which the Service has ruled is not a gift. Build the trust in South Dakota, where there is no rule against perpetuities, and allocate GST exemption at funding. For a married couple, exemption can fund a second to die policy inside the trust that multiplies the death benefit, all estate tax free. And where state income tax is the priority, a South Dakota nongrantor trust is a different design worth considering. The exemption is the fuel; the structure decides what it becomes.

The full piece is at turnipseed.law.

Move First, Convert Second: Changing Residency Before a Liquidity Event

Thinking about leaving New York for Florida before a bonus, a business sale or a Roth conversion? New York has two separate hooks. Domicile continues until the taxpayer proves it was abandoned, and statutory residence catches anyone who keeps a New York home and spends more than 183 days in the state, with any part of a day counting. In a residency audit the state reviews E-ZPass records, cell phone location data, credit card charges and travel records, and the taxpayer who cannot document his days loses them.

Florida paperwork helps but does not decide the case. For a Roth conversion the fight is residency on the conversion date, so the sequence is move first, convert second. For a sale, the planning window opens earlier still: before the term sheet, the family should ask who should own the asset, since a South Dakota nongrantor trust funded before the sale is a separate taxpayer outside New York's reach when it has no New York trustee, assets or source income.

The full piece is at turnipseed.law.

A South Dakota Trust for a California Family: What It Does and Does Not Do

There is no such thing as an "SD trust" the way there is a GRAT or a QTIP. What people mean is any trust whose situs and administration sit in South Dakota, and the family is choosing a body of law, not a product. That law offers no state income tax on retained income, no rule against perpetuities, directed trust statutes, the strongest privacy in the country, self-settled asset protection, and decanting to fix a trust without a courthouse. All of it requires actual South Dakota administration by a qualified South Dakota trustee. Situs is administration, not an address.

For a California family the candid part matters most. California still taxes a trust with a California fiduciary or noncontingent beneficiary, taxes accumulated income when it is distributed, has closed the incomplete gift nongrantor trust since 2023, and always taxes California source income. And a grantor trust saves no state income tax at all. South Dakota is a vault that sits alongside the California living trust, not a replacement for it.

The full piece is at turnipseed.law.

Before You Sign the Letter of Intent: Planning for a Business Sale

The most expensive sentence a business owner can say to an estate planner is "we signed the letter of intent last month." Most of the planning that reduces estate tax, defers income tax and protects the proceeds has to happen before a sale process creates a hard valuation and before any binding agreement exists. The sale is the deadline. Planning creates the options.

Start with the entity type, basis and timing. Then choose two or three tools from a short list: moving minority or nonvoting equity to a South Dakota trust before the value is fixed, a sale to a grantor trust to freeze the estate, GRATs for volatile equity, a charitable remainder trust or grantor lead trust for the sale year, insurance for liquidity and buy-sell funding, qualified small business stock planning where the facts support it, and a community property trust or nongrantor trusts for basis and state tax.

The full piece is at turnipseed.law.

Land Rich and Cash Light: Planning for the Farm Family

Many farm families are land rich and cash light: appreciated land, fully depreciated equipment, grain in the bin, and one child who farms while the others moved to town. The plan has to protect the land while solving liquidity and family fairness.

For a family that wants to preserve the farm, the strongest opening sequence is a qualified conservation easement, which produces a charitable deduction and lowers the land's value, followed by a transfer of the land or a land-holding entity to a South Dakota asset protection trust at the lower value. It must be a real conservation transaction, not a tax product. Around that core: an entity that separates land from operations and gives the active child control, life insurance to equalize the nonfarming children without selling land, charitable trusts for families that already give, careful timing of grain, equipment and installment sale income, and a professional trustee so the farm does not become a sibling dispute.

The full piece is at turnipseed.law.

Moving a Trust Does Not Move the Estate Tax. A Completed Gift Does.

Seventeen jurisdictions impose an estate tax, an inheritance tax or both in 2026, with thresholds from $1 million in Oregon to $15 million in Connecticut. A chart tells an advisor where exposure exists. It does not say what determines whether a client is exposed, and a reader thinking about South Dakota trusts can draw the wrong inference: that moving a trust there removes state estate tax. It does not.

State estate tax follows domicile at death and separately reaches real and tangible property in the taxing state. What changes the result is a completed gift to an irrevocable trust, because every one of the seventeen jurisdictions computes its tax from the federal gross estate, so the same transfer removes the assets from both. Timing matters, since New York and Minnesota pull back gifts made within three years of death, and the notes on Washington, Illinois, Oregon and Massachusetts are the ones advisors most often get wrong.

The full piece is at turnipseed.law.

Real Property, Personal Property, and Why the Label Matters

A reporter recently asked me why anyone outside a law school classroom should care about the difference between real and personal property. The label helps determine how an asset is taxed, how title passes, and which state's law and courts reach it. Real property passes under the law of the state where it sits; personal property passes under the law of the owner's domicile, which is why one family can end up with two probates.

The surprises are a New York co-op, which is personal property even though it feels like a home, and a rental building in an LLC, where the owner holds a membership interest rather than land. The costly shortcut is deeding a low-basis house to a child, who takes the parent's basis and faces a capital gain that an inheritance would have erased.

The full piece, including how each type is taxed and transferred, is at turnipseed.law.

When Your Home State's Trust Law Is Enough, and When South Dakota Earns Its Place

A client who has lived in one state for thirty years reasonably asks why her trust should be governed by the law of a state she has never visited. For most trusts it should not be. Home state law is usually adequate for a revocable trust, a grantor trust, or a family that wants a relative as trustee. South Dakota earns its place when the trust must last for generations, protect the person who funds it, keep family information private, or accumulate income free of state tax.

Arizona is a useful case study. Its 500-year and perpetual trust provisions carry an Attorney General's opinion that they likely violate the state constitution, and it has no self-settled asset protection statute. On directed trusts, decanting, quiet trusts, court file privacy and life insurance premium tax, the difference is one of degree, and on community property Arizona is the one that needs no help.

The full comparison is at turnipseed.law.

Family Trustee or Corporate Trustee: A Governance Decision, Not a Formality

Naming a trustee is a governance decision, not a formality. For a short, simple revocable trust, a family member is a reasonable choice. For long-duration, irrevocable, multi-beneficiary or tax-sensitive trusts, and for any trust intended to use South Dakota law, a corporate trustee is ordinarily the stronger choice. The real question is not who loves the family most but who can administer the trust with neutrality, continuity and a defensible process for decades.

A corporate trustee offers process, continuity, neutrality and regulatory oversight that a relative rarely matches, and family trustees fail in predictable ways: the sibling who cannot escape the appearance of favoritism, the capable relative with no records, the successor who misses the first Form 1041. South Dakota adds a legal reason: its statute conditions the effectiveness of a South Dakota governing law clause on real administration in the state by a qualified trustee.

The full piece is at turnipseed.law.

Why the Trustee and the Investment Advisor Should Be Different Institutions

Registered investment advisers increasingly want to offer trust services, and lawyers at firms that also run an advisory business are often asked to serve as trustee of a client's trust. Once a firm is registered as an investment adviser, anyone at the firm who serves as trustee gives the firm custody of that client's assets under the SEC custody rule, and custody brings a qualified custodian requirement, quarterly statements and an annual surprise examination. There is a trust law problem too: a trustee that hires its own affiliate as investment adviser is on both sides of the transaction.

The answer is a directed trust. A trust company serves as trustee and holds the assets, the advisory firm is named investment trust advisor and directs the investments, distribution decisions stay off the firm's personnel, and counsel remains the family's lawyer. South Dakota's statute relieves the directed trustee of any duty to monitor the advisor, which is what makes the structure work at a directed trustee's price.

The full piece is at turnipseed.law.

DAPT or SLAT: Whose Access Survives?

Clients who want to move assets out of their estates while keeping some access are usually offered a spousal lifetime access trust or a self-settled South Dakota asset protection trust. Both can be grantor trusts, both can sit in South Dakota, and both can hold the same assets funded by a completed gift. The real difference is whose access survives.

In a SLAT the household reaches the assets only through the spouse, so if the spouse dies first or the marriage ends, the donor's access ends with it, and unwinding an irrevocable trust after a divorce is hard. In a DAPT the donor is a discretionary beneficiary in his own right, so the plan does not depend on the marriage, a divorce clause costs the donor nothing, and one trust can serve both spouses without inviting the reciprocal trust doctrine.

The full side-by-side is at turnipseed.law.

What the Asset Protection Trust Cases Actually Punish

Attorneys in states without an asset protection trust statute often ask how a self-settled trust formed under another state's law will hold up if the client is sued. I went through every reported United States decision on a domestic asset protection trust. There are fourteen: three for the trust, ten against the settlor, and one mixed. The headline is not the score. Every adverse decision turned on something the settlor or the drafter did.

Timing decided most of them: trusts funded after a claim existed or while one was gathering. Settlor control defeated the rest: brothers, sons, employees and the settlor himself serving as trustee. The drafting failures were severe, including a trust that recited creditor avoidance as its purpose and another that reserved an unlimited power to amend. Marriage and out-of-state land were the recurring soft spots. The two clean creditor cases the trust won involved trusts funded years before the debt existed, with no role for the settlor.

The full piece, with the clean-trust checklist, is at turnipseed.law.

Corporate Charitable Giving After the 2026 Rules: Six Lessons for C Corporations

Beginning with 2026 tax years, a C corporation's charitable contributions are deductible only to the extent they exceed 1 percent of taxable income, with the familiar 10 percent ceiling still above that. A floor beneath the ceiling changes the arithmetic of corporate giving and makes planning close to mandatory.

Six lessons from my series on the subject: follow a sequence rather than writing a check and hoping; give appreciated property before a sale is too real; choose the asset and the donee deliberately; use the charitable stock bailout but never prearrange the redemption; consider a charitable lead trust with rising payments; and treat substantiation as a closing condition, because the deduction is won before the return is filed.

The full piece is at turnipseed.law.

Five Estate Planning Mistakes Families Make, and How to Avoid Them

When Better Report asked me about the estate planning mistakes that create the most trouble for families, five came to mind, and they match what I see in practice: having no plan at all, choosing fiduciaries late or badly, telling no one about the plan, never revisiting the documents, and planning for death but not for incapacity.

Most estate contests are not really about the law. They arise from surprise, from a sense that a sibling exercised influence, or from a decision that seemed arbitrary because it was never explained. Each of the five mistakes is a plan left unfinished, and the fix is the same: finish it, tell the people who need to know, and look at it again whenever life changes.

The full piece is at turnipseed.law.

The Simplest Estate Planning Mistake: Forgetting to Fund the Trust

One of the simplest estate planning mistakes is also one of the most consequential: failing to fund the trust. An unfunded trust is the equivalent of buying moving boxes and then forgetting to pack the house. A revocable living trust controls only what is inside it, and assets left in the client's own name pass through the probate the trust was meant to avoid.

The documents may be excellent. The plan still fails if deeds, account titles and beneficiary designations were never coordinated with it. The fix is a checklist and an annual review: deeds in the trustee's name, accounts titled or payable to the trust, business interests assigned, beneficiary designations current, and a will that pours over into the trust.

The full piece, with the checklist, is at turnipseed.law.

The Great Wealth Transfer and AI: Complexity Is the New Competitive Advantage

Two forces are reshaping estate planning at the same time. The Great Wealth Transfer is creating unprecedented demand for attorneys who can handle sophisticated planning, while artificial intelligence is commoditizing the routine end of the practice. A competent revocable trust and pour-over will can now be produced in minutes from a questionnaire.

The competitive advantage for an estate planning attorney is no longer knowing how to draft a revocable trust. It is understanding sophisticated domestic and international income, estate, gift and GST tax planning, business succession, asset protection and cross-border issues, and knowing how those pieces fit together for a particular family. The future belongs to attorneys who solve complex problems, not just prepare documents.

The full piece, including what this means for clients choosing a lawyer, is at turnipseed.law.

Big Contract, Bigger Plan: What Athletes, Founders, and Executives Do After the Tax Hit

A graphic breaking down Myles Garrett's $177.9 million NFL contract went viral this summer because the numbers were enormous: roughly $99 million to taxes and fees, about $78.9 million net. The planning point is not what most people expect. A trust does not make salary tax-free. Salary is salary.

The better question is what happens to the wealth after the tax hit. For an athlete, founder, executive, physician or business owner, a limited liability company paired with a South Dakota nongrantor asset protection trust can turn after-tax income into a protected, long-term structure that addresses creditor exposure, divorce, estate tax and the governance of wealth for children who are not ready to receive it outright. Earning the money is the first play. Protecting it is the game plan.

The full piece is at turnipseed.law.

The $617 Billion Wake-Up Call: Philanthropy Needs a Trust Strategy

Charitable giving in the United States reached $617 billion in 2025, above $600 billion for the first time. The more important number is where the growth came from: bequests rose 16.6 percent, foundation giving reached $117 billion, and a single planned gift, Paul Allen's $3.1 billion bequest, moved the national total on its own. Major philanthropy is now driven by intentional estate, trust and foundation planning rather than by last-minute generosity.

For a family that gives, the question is no longer only how much. It is what structure lets the giving, the family and the legacy work together: a charitable lead trust for annual givers, a charitable remainder trust for low-basis assets, an insurance trust for liquidity, a dynasty trust for what stays in the family.

The full piece is at turnipseed.law.

Private Jets, Public Taxes: Tax Policy Follows Visible Wealth

A Fortune column warned that New York's attention to high-value assets may spread from real estate to private aviation. Whatever happens to that proposal, the pattern behind it is worth understanding: tax policy follows visible wealth. If an asset is easy to see, easy to value and easy to connect to a family, it is easy to tax.

For aircraft, real estate, business interests and collectibles, ownership design matters as much as the purchase price. One structure I use often places the asset in a privacy-oriented Wyoming limited liability company whose interests are held by a South Dakota domestic asset protection trust. Each layer does a job: privacy, asset protection, a fiduciary administrator and a trust law built for multigenerational planning.

The full piece, including what such a structure does not do, is at turnipseed.law.

Passion Assets, Hobby Losses, and the IRS: Lessons From a $200,000 Horse Case

A Nebraska couple who bred and trained horses deducted their losses as business expenses and saved nearly $200,000 in tax. The Tax Court disallowed it: they had not shown a real profit motive under the hobby loss rules. The warning signs were familiar. No business plan, weak records, personal and business expenses mixed together, years of losses, and plenty of personal enjoyment.

The lesson is not that you cannot love horses. It is that a passion activity treated as a business has to be run like one. No trust can turn a hobby into a deductible business, but for serious passion assets such as horses, ranches, vineyards, aircraft and collections, the right structure supports the governance, records, asset protection and succession that make the business case credible and keep the asset in the family.

The full piece is at turnipseed.law.

The $15 Million Myth: Why State Death Taxes Still Bring Families to the Planning Table

With the federal estate tax exemption at $15 million, many advisors save estate planning conversations for the ultra-wealthy. That misses a large group of families who are well below the federal exemption and still face a state estate or inheritance tax. Oregon's threshold is $1 million, Massachusetts' is $2 million, Minnesota's and Washington's are $3 million, Illinois' is $4 million, and Maryland's and Vermont's are $5 million. Several states impose top rates of 16 percent or more.

A family with a $3 million or $7 million estate may have no federal problem and a real state problem. That creates an earlier planning trigger, and properly structured irrevocable trusts are often the answer. The planning conversation should not stop at the federal exemption.

The full piece, with how inheritance taxes differ from estate taxes and why domicile and property location both matter, is at turnipseed.law.

Survivor-Ready Planning: The $54 Trillion Transfer That Comes First

The Great Wealth Transfer is usually described as money moving from parents to children. The transfer that happens first gets less attention: an estimated $54 trillion passing between spouses through 2048, most of it to women. When Money magazine asked me about it, my advice was the same advice I give clients. After a spouse dies, the first priority is not to reinvest the inheritance or rewrite the estate plan. It is to slow down, protect cash flow and understand the whole picture.

For the first six to twelve months a surviving spouse should delay anything high-dollar or hard to reverse, confirm that ordinary bills can be paid for 90 days, inventory every asset and deadline, and build a survivor roadmap. Couples should build that roadmap while both are alive. The test is simple: if one of us died tomorrow, would the survivor know what to do next Monday morning?

The full piece, including how marital trusts, South Dakota community property trusts and asset protection trusts turn the roadmap into a working plan, is at turnipseed.law.