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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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Preventing End of Life Costs from Destroying Your Estate

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Category: Asset Protection Planning Elder Law Long Term Care Medicaid Nursing Homes

It’s very rare that anybody has covered all possible risks in terms of their wealth management when it comes to income and cash flow, guaranteed income, cash, investments, and the connection between long term care and your estate. If you skip planning for long term care expenses, you may find that your other wealth management tools and strategies don’t hold up to the rising cost of healthcare.

Preventing End of Life Costs from Destroying Your Estate
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The average cost per month for a long-term care facility is over $7,000. That’s why long term care planning is so essential. When a long-term care insurance policy is too expensive or not an option because you do not qualify.

There are alternatives, however. Structuring your estate in a particular manner can help you guard against the cost of long term care. Two common strategies are eliminating assets through trusts and transfers. This means that down the road, if you need to reduce your assets for Medicaid eligibility, you’ve already done most of the work. If you are confronted with a long-term care event before you have done this, you could find yourself having to “spend down” your assets anyways before government assistance kicks in, depleting your savings and forcing you to do it rapidly, which is rarely in your best interest. However, if you do it incorrectly, it has the potential to have a severely negative impact on eligibility and penalty periods. To learn more about trust planning, gifting, and other strategies to mitigate risk in estate planning, email info@lawesq.net or contact us via phone at 732-521-9455.

Will your good deed go unpunished?: Limiting nonprofit individual liability

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Category: Asset Protection

A common question from trustees, officers, directors and volunteers at nonprofit organizations is to what extent these individuals face liability as representatives of the organization. Failure to adhere to tax formalities or mismanagement can, in some situations, make an individual person liable. In this instance, asset protection for the officer and direct is vital in addition to insurance.

Will your good deed go unpunished Limiting nonprofit individual liability
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Typically, lawsuits of this kind happen in one of a handful of ways:

  • An error or omission resulting from a trustee, officer, or manager’s decision (or lack thereof)
  • An allegation regarding corporation activities I which the director, officer, or trustee was not involved
  • An allegation of corporation activities in which the trustee, director, or officer was involved

There is a lot at stake in a lawsuit of this type, especially when the other party is alleging serious professional negligence that leaves an individual officer or director exposed to a high level of personal risk. Errors and omissions claims, which happen most often when a nonprofit organization has very little resources compared with what the claimant hopes to receive in damages, can devastate a nonprofit. These claims result from situations in which a nonprofit officer or director is held responsible for a decision or lack of decision in a particular situation. For example, a nonprofit event where an individual person is injured could lead to a lawsuit about the nonprofit’s decision to hold the event in the first place.

Thankfully, there are approaches you can take to mitigate this risk. This includes carrying errors and omissions insurance, carrying liability insurance, managing the affairs of the nonprofit as a corporation, and providing for partial or complete indemnification of officers and directors through specific agreements and don’t forget your asset protection planning. Some careful planning in advance can go a long way towards limiting lawsuit exposure. Contact us today through email at info@lawesq.net or via phone at 732-521-9455 to begin your asset protection plan.

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
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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.

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.