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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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Elder Law Tips: 7 Scams That Target Seniors

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Category: Asset Protection Baby Boomer Generation

Unfortunately, the elderly are frequently targeted in fraudulent schemes because the individuals carrying out these scams believe these individuals are more vulnerable and are more likely to have accumulated wealth. What follows are seven of the most recent and common scams targeting elderly individuals. 1D1iOB5glGAXlnOxXmQJ2CG7dNc6GG0GXY-G8vdLRBE

IRS Phone Scam

Recently seniors received phone calls threatening arrest and driver’s license suspension for nonpayment of back taxes. The fraud earned the scammers more than $5 million.

Health Care Scam

Seniors in this fraud scheme are asked to provide personal information in order to receive help with health insurance. That information can be used for identity theft.

Great Grandchild Claims

Sometimes, elderly individuals will receive communication from an alleged great grandchild asking for money. They are advised to verify the identity before sending any funds.

Unethical Financial Advice

Some individuals will claim to be professional financial advisors, making investments on a senior’s behalf. Individuals should always be carefully vetted before being used for financial management or advice.

Obituary Scheme

In this situation, individuals will call the family of a recently-deceased relative and claim that money is owed or that a package needs to be delivered. The “package” is then sent to the family cash-on-delivery, but it’s usually empty or worthless.

Prescription Drug Ruse

With prescription costs being a primary concern for elderly individuals, many turn to the Internet for cheaper prices. Sometimes, this can mean that money is taken without the delivery of any drugs. Make sure you fully investigate a site or service before signing up.

Funeral Plot/Service Scams

Unfortunately, some funeral homes might encourage seniors to purchase a casket or burial plot when they intend to use cremation. Read the fine print and make sure a family member knows your wishes.

Sadly, these scams are all too common. One of the best ways to combat scams is to ensure your estate planning and elder planning have considered many options. Get advice from an experienced attorney today at info@lawesq.net.

 

Protecting Assets: Jurisdiction And Entity Structure Are Key

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Category: Estate Planning

The limited liability company has become the most popular entity for a small business owner to use, and they may also offer some benefits in the form of asset protection planning. Choosing the LLC instead of a corporation structure can be a wise decision, but it raises the question of where the entity should be established. There are a few different factors to consider when opting for an LLC. shutterstock_228478342

Some states have specific language in the statutes that serves to protect single-member LLCs, such as Alaska, Wyoming, and Nevada. Wyoming in particular was a popular choice for establishment because of the low cost and also the fact that managers and members within the LLC didn’t have to be disclosed publicly. A recent court case in that state, however, raises questions about the value of continuing to use Wyoming for planning.

That court case, Greenhunter Energy, Inc. v. Western Ecosystems Technology, Inc, upheld a previous ruling that allowed the corporate veil to be pierced. A creditor was able to pierce the veil to hold a parent company responsible for the subsidiary’s debt.

Under IRS guidelines, single-member LLCs are eligible for taxation as disregarded entities. In fact, one of the major advantages of a single-member LLC is this perception of greater liability protection when compared with a corporation in conjunction with this disregarded tax treatment.

As this one case indicates, planning and current knowledge of issues is critical for the proper structure of your business. Consult with an asset protection specialist about your concerns. Schedule an appointment today at info@lawesq.net.

Distinguishing Non-probate and Probate Assets

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Category: Asset Protection

Ensuring that your will is properly written and structured is critical for the will’s terms to be carried out in the manner you wish. Failing to properly distinguish probate from non-probate assets is a big mistake that could lead to your dispositive provisions being named ineffective.

Distinguishing Non-probate and Probate Assets

(Photo Credit: wills.about.com)

Probate property can be defined as items that are directly owned by you without a legally recognized designated beneficiary. Jewelry, family heirlooms, artwork, or bank accounts without a designated beneficiary to be paid on death are examples of probate property.

On the other hand, non-probate property is those assets which include a legally recognized beneficiary to be paid on your death. Property held in joint tenancy or bank accounts with a designated beneficiary are examples.

Why does this matter? Non-probate assets will not pass through the terms of the will. This means that if you outline wishes in your will for one person to receive all the assets, but your non-probate assets state another beneficiary, the terms of your will “surrender” to those beneficiary designations. This could have the unintended consequence of your planning falling through.

To learn more about the differences with assets, and how you can properly outline your wishes or create trusts to detail how these items are passed on, contact our offices today for a consultation. Call us at 732-521-9455 or through email at info@lawesq.net to begin.

Summer Wrap Up: Estate Planning For Your Vacation Homes

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Category: Asset Protection

The close of another summer is a great time to think about your future plans for any family-owned vacation homes. It can be really hard to sell a property where it requires approval from all children, and it’s often difficult to make these “equally split” arrangements work.

Summer Wrap Up Estate Planning For Your Vacation Homes

(Photo Credit: gsacpas.com)

Start by thinking about your goal for the home: do you want it sustained for future generations, do you want it to become the property of just one or two children, or do you not have anyone to establish as the asset recipient at all? These are important questions that will help guide the future of your vacation home.

Trusts can be a great way to manage the future of vacation homes. They can be used to help pay for expenses or create a usage schedule, which is especially helpful when there could be multiple owners. To figure out the proper amount to put aside for expenses, you can create a list of what’s needed on an annual basis, including property taxes, insurance, routine maintenance, and repairs. This can help to eliminate arguments later on.

In the trust, it’s also important to outline the rules under which the house can be sold. This should be done even if there are no immediate plans to sell the house. Talk with an estate planning attorney to determine the best way to structure your vacation home future plans and possible trust. Reach out to us at info@lawesq.net or over the phone at 732-521-9455.

How Did Shelly Sterling Control the Clippers Sale Decision?

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Category: Asset Protection Asset Protection Planning Trusts

The Los Angeles Clippers sale recently seemed to go ahead just the way that most players, fans, and the NBA commission wanted it, leading to an agreement that sold the team to former Microsoft CEO Steve Ballmer for $2 billion. The control behind the sale, however, went to Donald Sterling’s wife, Shelly, causing many to wonder just how she managed it.

How Did Shelly Sterling Control the Clippers Sale Decision
(Photo Credit: wallerz.net)

Shelly made her move with a boilerplate provision included in the Sterling family trust, which maintained ownership over the Sterling’s interest in the Clippers. Since both Shelly and Donald were co-trustees holding equal authority over that trust, she was eligible to make the decision based on another standard trust provision regarding mental competency.

Shelly had already had Donald evaluated for mental competency. Under the trust’s guidelines, if either Shelly or Donald were found by two qualified physicians to have “an inability to conduct business affairs in a reasonable and normal manner”, that individual could be removed as co-trustee. As a result, Shelly would have become the sole trustee with the decision making power and authority to sell or manage the business how she saw fit and that is her strategy.

Whether planning for your family’s assets or for those of an NBA team owner, when in generating trusts’ planning attorneys may recommend that provisions like the one above are put into the language for the protection of both individuals. If not included, the co-trustee (or business partner, as it may be) could be exposed to serious risk in the event of some form of incapacity. If not planned at all, it could all be left up to a court to decide. Get more details about trust planning today by contacting us at info@lawesq.net or at 732-521-9455.