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Important IRS Update: Significant Interest Penalty Increase for Tax Underpayments

The Internal Revenue Service (IRS) has recently announced a critical change that could significantly impact taxpayers who underpay their taxes. This update is particularly relevant as we approach the next tax filing season. Previously, the IRS charged a 3% interest penalty on estimated tax underpayments. However, this rate has now been increased to a substantial

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Will Inflation Hurt Stock Returns? Not Necessarily

Investors may wonder whether stock returns will suffer if inflation keeps rising. Here’s some good news: Inflation isn’t necessarily bad news for stocks. A look at equity performance in the past three decades does not show any reliable connection between periods of high (or low) inflation and US stock returns. Since 1993, one-year returns on

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Maximize Your Charitable Impact with These Four Strategies

As the year draws to a close, it’s a perfect opportunity to rethink how you give to charity. This is important for managing how much tax you pay and how much help reaches those in need. Here are four effective strategies: Need Guidance? Reach Out to Us! These strategies are just a starting point. There

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Side Business? Silent Partner? What’s the Risk? Duties of non-manager members of LLCs

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Category: Asset Protection Asset Protection Planning Estate Planning LLCs

If you are interested in creating a managed multi-member LLC, one of the most popular questions for individuals in this position is whether non-manager members are held to the same standards (or have the same liability) with regards to fiduciary duties like care and loyalty. The answer is “it depends”.

Side Business Silent Partner Whats the Risk Duties of nonmanager members of LLCs
(Photo Credit: serpent.com)

In the non-manager members are involved in some significant aspect of the business, the operating agreement should generally include an expression of such duties for these individuals. Looking at the landscape of typical non-manager member involvement in the business of these LLCs, significant duties are typically rare with smaller businesses that are closely held.

There are some cases where the operating agreement might not address this question specifically. In this scenario, the LLC act governs and can provide some important insight. A lot of these acts, however, are quiet when it comes to this particular question. Some agreements, however, do have specific information about these duties included. An example is the Delaware Limited Liability Company Act, which actually negatives any duties for the non-manager members unless an express clause in the LLC agreement states anything to the contrary.

LLC formation and agreement construction can be aided significantly with the watchful eye of an attorney. Call us at 732-521-9455 or send us an email to info@lawesq.net to discuss your needs.

Side Business? Silent Partner? What’s the Risk? Duties of non-manager members of LLCs

Categories
Category: Asset Protection Asset Protection Planning LLCs

If you are interested in creating a managed multi-member LLC, one of the most popular questions for individuals in this position is whether non-manager members are held to the same standards with regards to fiduciary duties like care and loyalty. The answer is “it depends”, but with a few stipulations.

LLC practice - fiduciary duties of non-manager members of multi-member LLCs
(Photo Credit: serpent.com)

In the non-manager members are involved in some significant aspect of the business, the operating agreement should generally include an expression of such duties for these individuals. Looking at the landscape of typical non-manager member involvement in the business of these LLCs, significant duties are typically rare with smaller businesses that are closely held.

There are some cases where the operating agreement might not address this question specifically. In this scenario, the LLC act governs and can provide some important insight. A lot of these acts, however, are quiet when it comes to this particular question. Some agreements, however, do have specific information about these duties included. An example is the Delaware Limited Liability Company Act, which actually negatives any duties for the non-manager members unless an express clause in the LLC agreement states anything to the contrary.

LLC formation and agreement construction can be aided significantly with the watchful eye of an attorney. Call us at 732-521-9455 or send us an email to info@lawesq.net to discuss your needs.

Do You Have a Digital Fortune?

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Category: Estate Planning Trusts Wills

The estate planning landscape is changing, and it’s because our approach to determining assets is changing, too. According to a survey by McAfee, Americans believe they own an average of about $54,000 in digital assets. Curious about a digital asset? What about your big ITunes collection? Downloaded resources and books on your Kindle? What about Paypal? Bitcoins? Or even more sentimental accounts, like a genealogy archive that’s helped you to identify relatives?

Do You Have a Digital Fortune
(Photo Credit: mariopartylegacy.com)

Getting access to these materials can be difficult after a family member passes away. Your email account materials might be deleted before family members can even access the material and in the meantime, your accounts could be exposed to online theft risk.

This is where a Digital Estate Plan steps in. It will help your will executor carry out your wishes in the distribution of your assets. This can be a complex process, since many of the sites mentioned about base their service agreements on federal laws. Nevertheless, it’s an important exercise to gather up an inventory of material you might like your family to be able to access if something happens to you. At the least, your family will be aware of the information’s existence. Login information and passwords should also be included with this material.

Make sure you’re up to date with estate planning laws and trends by working with an experienced attorney. Reach out to us to get started at info@lawesq.net or contact us via phone at 732-521-9455.

For Student Loans – Read the Fine Print: Risks for Student Loan Borrowers and Co-Signers

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Category: Asset Protection Estate Planning

The details matter when it comes to getting a signature on your student loan agreement: it turns out that some private student loans have a caveat for what happens if the co-signer passes away. In some private loans, the student or recent graduate has to pay up if their relative passes away- immediately and in full. If the borrower can’t make that payment, he or she faces a big hit on their credit rating.

For Student Loans Read the Fine Print Risks for Student Loan Borrowers and Co-Signers
(Photo Credit: dailyfinance.com)

Many students who have to use private loans to finance their education might not even notice the provision, but it’s legal. Receiving a notice for demanded payment in full often terrifies a recent graduate, who may ignore the notice and suddenly feel buried financially. Borrowers can have their loans released after a few years of earnings and positive credit history, but they also have an option to transfer to another co-signer. Unfortunately, not many students are aware of these options right away.

When it comes to student loans, it’s important to read all of the stipulations in the loan agreement, especially when it’s a private lender. Make sure you walk through all of your options if a parent does pass away, too. No one plans for the situation where a parent or relative passes away in this manner, but it’s worth factoring into your general estate plan if you are a co-signer on someone else’s loan. Ensure that the borrower knows and has a plan for how they would handle such a situation. To learn more about a comprehensive estate plan, contact us through email at info@lawesq.net or contact us via phone at 732-521-9455 to get started.

Put Your Trust in a Trust

Categories
Category: Estate Taxes Last Will & Testament Trusts

Now is a great time to evaluate how using a trust can help you achieve your financial goals. The federal gift tax and estate tax laws give big incentives for using trusts in estate planning. In the pasts, trusts have been used mostly to transfer gifts to children while limiting estate taxes on wealth, but there are numerous other benefits.

Put Your Trust in a Trust
(Photo Credit: marketo.com)

An appropriately funded trust can help ensure that your assets are protected and available in the event that you become incapacitated. When you pass away, that same trust can be used to pass on assets to your beneficiaries. You can also protect your legacy by keeping your assets away from any of the heir’s creditors, too.

There are probate savings and privacy reasons that a trust can benefit you, too. There are potentially large fees for going through probate and your probate records will also be public. Putting your assets into a revocable trust instead can keep them from having to go through probate at death- therefore protecting you and your family’s privacy.

Finally, trusts can be a good tool when you live in a state that has an estate tax. Some states levy estate taxes that are rather substantial, but trust planning is one way to cut down on how many estate taxes will be levied on your death. This can also be a good tool for those who have real estate located in a state that imposes estate taxes.