With the final dust comfortably settling on this yearâs tax season, we can know begin to put together the pieces of this new reality that may have plan sponsors and their service providers rethinking their long-held strategies.
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The Tax Cuts and Jobs Act preserved the sanctity of the treasured retirement contribution deduction – it even made it more important – but it also did a few things that might surprise some business owners.
While the fiduciary should be fairly compensated, the fiduciary is prohibited from engaging in activities that might increase that compensation to the detriment of the interests of the beneficiary. Such activities represent the definition of a self-dealing transactions. Here are some examples of self-dealing transactions that, if executed, will likely result in a fiduciary breach.
On the face of it, there appears to be little room for debate. Upon closer examination, however, the specifics of particular circumstances can muddle things up. Would you like to see what we mean by this? Hereâs what you get when you ask the experts whether or not a fiduciary can ever legally engage in self-dealing.
Are LPOAs enough to end the confusion? Maybe not. But they do provide the legal basis for which one can substantiate the reality of a fiduciary relationship.
Remember, itâs not what you know thatâs important, itâs knowing that you donât know whatâs important thatâs important.
