When retirement accounts pass via trust to a minor child, both time and tax planning become very important. The SECURE Act 2.0 modified the treatment of inherited IRAs, and in that changed the taxation of distributions to children, as well as when distributions must be taken.
A conduit trust requires the trustee to pass all retirement distributions directly to the child. This keeps things simple and qualifies the child for “Eligible Designated Beneficiary” (EDB) status until age 21. During that time, distributions follow the child’s life expectancy.
However, once the child turns 21, the clock starts: All assets must be withdrawn within 10 years, and possibly in annual installments, depending on when the account owner passed away.
An accumulation trust, by contrast, gives the trustee power to hold distributions inside the trust. This protects assets from creditors or early spending but comes with a tax tradeoff.
Distributions retained by the trust are taxed at high rates quickly. Unless the remainder beneficiaries qualify to be ignored under IRS rules, the account may need to be emptied within 10 years of the original owner’s death, even if the child is still a minor.
Families often overlook how fast taxes increase. Conduit trusts expose the child’s distributions to the “kiddie tax,” which means those funds may be taxed at the parents’ rate.
On the other hand, accumulation trusts trigger the trust’s compressed income brackets and possible net investment income tax. On top of that, the IRS confirmed that individuals who turn 73 in 2024 must begin required minimum distributions by April 1, 2025, ending the extended grace period previously available under pandemic-era relief rules.
At O’Brien Law Firm, LLC, we help clients across DeSoto County and Memphis draft minors’ trusts that honor their wishes without triggering avoidable taxes. Whether you’re creating a new estate plan or adjusting an outdated one, we’ll help you apply the SECURE Act 2.0 rules correctly. Call 662-672-7619 or fill out our intake form to get started.
Subchapter V is a simplified version of Chapter 11 bankruptcy designed to help small business owners reorganize without losing control of their operations. It’s faster, cheaper, and gives owners more say in how debts are repaid.
Sole proprietors in Southaven, Memphis, or any city across the USA may find Subchapter V as a beneficial path in navigating their bankruptcy process. However, a sole proprietor must ensure it is done properly and with all considerations considered.
Subchapter V isn’t available to everyone. As of April 2025, your total non-contingent debt must be under $3.42 million, and at least half of that must come from business activity. If most of your debt is personal or if your business is focused on one rental property, you may not qualify.
Another issue is that you must be “engaged in commercial activity” at the time you file. That can include winding down or collecting receivables, but it’s something courts look at closely.
Even if creditors reject your plan, you may still get it confirmed through a cramdown. To do this, you must commit all your projected disposable income over three to five years.
You also need to show that the plan is feasible and includes remedies if you fall behind, like allowing a creditor to take the asset back. However, unlike traditional Chapter 11, you don’t have to pay creditors in full before keeping your business.
Subchapter V lets business owners stay in charge. There’s no creditors’ committee unless the court orders one, and there are no U.S. Trustee fees. If you meet deadlines and remain in good faith, you retain full decision-making power. This control is often what makes Subchapter V attractive for sole proprietors looking to stay afloat.
At O’Brien Law Firm, LLC, we help sole proprietors across DeSoto County and Memphis use Subchapter V to save their businesses and reset their finances. Call 662-672-7619 or complete our intake form to schedule a confidential consultation.
Bankruptcy does more than just change your bank account. For a lot of people in Southern Mississippi, it’s a stressful reset button. However, it’s also a chance to start over without the stress of old debts. When the court closes your case, the bills stop coming after you, and you can finally think about the big picture again. That’s when you should take a closer look at your estate plan.
The plan you made before bankruptcy was built for a different life. Maybe you had more property then, or different accounts, or a life insurance policy you’ve since changed. Some assets might have been sold to pay creditors, while others, like a Mississippi homestead up to a certain value, were protected. If your will or trust still lists property you no longer own, or leaves money to people you no longer intend to benefit, you’re leaving behind a legal mess for your family.
There’s no rush to rewrite everything the day after discharge. First, make sure your footing is solid. That means:
Jumping into new loans too soon can undo months of hard work. Think of this as rebuilding the foundation before adding new rooms to the house.
Once your finances feel steady, your estate plan can reflect that. You could start over with your will or make a trust to keep your property out of probate. You could change your life insurance to make sure your dependents are covered, or you could check your retirement accounts to make sure the right people are named.
We’ve helped people across Southern Mississippi protect what they’ve rebuilt after bankruptcy. At O’Brien Law Firm, LLC, we understand you don’t want to go through financial loss again, and a strong estate plan is part of that protection. Call us at 662-672-7619 or use our online intake form to get started.
Filing for bankruptcy is meant to give you a fresh financial start, but what happens if you’re in the middle of your case and a relative passes away, leaving you money or property? In Mississippi and southwest Tennessee, the law is clear: timing matters, and so does how your case is structured.
When you file for bankruptcy, your assets become part of the bankruptcy estate. Under federal law, if you become entitled to an inheritance within 180 days of filing, it’s usually pulled into that estate. What matters is the date of the person’s death, not the day the inheritance ends up in your hands.
In Chapter 7, non-exempt inherited assets can be sold to pay creditors. In Chapter 13, the value of a non-exempt inheritance can raise your monthly payments.
Mississippi has opted out of federal bankruptcy exemptions, meaning you can only use exemptions under state law. For example, Mississippi’s retirement account exemption protects funds in certain qualified plans if you are the participant or named beneficiary.
If the retirement funds came from someone else’s account and you’re not a beneficiary, you likely can’t claim that protection.
Inheritance information is hard to hide. Probate records are public, and trustees often hear from executors, relatives, or even the court. Failing to disclose an inheritance can have severe consequences. You could lose your bankruptcy discharge, be ordered to repay the amount (even if it’s spent), or face allegations of bankruptcy fraud. The cost of trying to hide it is almost always higher than being upfront.
At O’Brien Law Firm, LLC, we understand how frustrating it is to think you might lose an inheritance during bankruptcy. We help clients in Southern Mississippi figure out what’s protected, what’s not, and how to minimize the impact on your case.
If you’ve received or expect to receive an inheritance mid-case, don’t guess your next step. Get legal guidance before you act. Call us at 662-672-7619 or complete our online intake form to discuss your situation and learn your options. The sooner we talk, the more we can do to protect your financial future.
Running a family business in Mississippi can bring relatives closer together or tear them apart when it is time to plan for the future. Without clear estate planning, fights over control and ownership can erupt quickly. Many family businesses never make it past the second generation because of these conflicts. Business owners who plan ahead can protect the company and keep family relationships strong.
A buy-sell agreement acts like a rulebook for what happens when an owner retires, passes away, or can no longer run the business. These agreements often use life insurance to fund the buyout. This means cash is ready to buy the departing owner’s shares without forcing the company to sell assets or borrow money.
There are different ways to set these up:
No matter the type, the main goal is to avoid confusion and keep control in the right hands. It is also important to update these agreements regularly to reflect changes in the family or business.
A family limited partnership (FLP) can help transfer business ownership while keeping decision-making power with certain family members. In an FLP, the parents or founders usually serve as general partners and keep control, while children or other relatives hold limited partnership interests.
This structure can prevent non-active family members from taking over daily operations, which is a common source of disputes. An FLP can also help reduce estate taxes and protect business assets from creditors.
Issuing different classes of stock is another tool that works well. Voting shares can go to family members involved in the business, while non-voting shares can be given to those who are not. This approach lets all heirs share in profits without giving everyone a say in big decisions, reducing the chance of future conflicts.
At O’Brien Law Firm, we know how stressful it feels to think about passing on a family business. We help Mississippi families create solid plans that protect both the business and family bonds. If you want to make sure your business stays strong while avoiding future fights, contact us today.
