Friday, May 18, 2018

Why Do You Need A Registered Agent?

Nevada Requires businesses to have a registered agent. A registered agent is a responsible party designated to receive service of process notices, correspondence from the Secretary of State and other official notifications.

A registered agent can give you peace of mind knowing that you will not miss receiving an important notice or have to accept official documents at your place of business, a possibly embarrassing situation and disruption to your clients.

If you do not have a physical location in Nevada, you must select a registered agent to accept notification and documents on your entities behalf.

Our Firm can handle your registered agent needs. We are a Commercial Registered Agent with the State of Nevada. Contact us Today!

Monday, May 14, 2018

A-Z of Estate Planning

V – “V” stands for Valuation of the estate.  The VALUATION of your estate will determine whether or not it will be subject to tax.  Of course, there are vehicles, such as gifts to charity, whether at death or before that can help reduce exposure to tax, it is the final value that will determine how much tax, if any, that will be due. It can be the case that an estate VALUE is unfairly high due simply to the fact that a person died on a day that, for example, the stock owned by the decedent was unusually high on that date.  Fortunately, the Internal Revenue Code allows a trustee to choose a VALUATION date six months after the date of death, thus, perhaps, increasing the chance of a more favorable (less tax heavy) VALUATION for the estate. 

W – “W” stands for WILL.  Sometimes formally called “LAST WILL & TESTAMENT”, your WILL (very much like a living TRUST) is a written set of instructions for how you want your assets distributed at your death.   Once again, one of the main differences between a WILL and a TRUST is that the administration of a WILL is generally required to go through the public PROBATE process, while a TRUST administration is typically handled privately.  

X – “X” stands for GENERATION X.  Typically considered be those born after the Baby Boomers, this generation, which began in 1961 and ended around 1981 are reaching middle age now, and if they have not already, should very seriously consider putting their estate in order. It is really never too early to begin estate planning, even if it is obtaining a low priced life insurance policy and having a simple WILL when you are in college, or soon thereafter.

 Y – “Y” stands for YOU and YOUR.  A well thought out estate plan, which has been put in place will put YOU at ease knowing YOUR family and beneficiaries are provided for and will not have to pay for or struggle with an incomplete estate.

Z – “Z” stands for ZERO.  The goal of many individuals is to have their estate pay ZERO taxes at their death.  Until the recent Trump tax cuts, this was far more difficult even for modest estates.  Now, and until the year 2025, a single person can leave his heirs over $11 million dollars and pay ZERO tax on the transfer.  Individuals leaving in excess of $11 million dollars, can most definitely still benefit from estate planning, greatly reducing the tax owed at their death.  

Friday, May 11, 2018

A-Z of Estate Planning

S – “S” stands for SPENDTHRIFT TRUST PROVISION.  A SPENDTHRIFT TRUST PROVISION allows the creator of a trust (“Settlor”) to create a trust (SPENDTHRIFT TRUST) for a beneficiary so that the assets in that SPENDTHRIFT TRUST are secure against creditors of the beneficiary.  This is often times utilized by parents who are concerned that money left to their children will be spent without restraint once the child gains control of the asset.  A SPENDTHRIFT TRUST gives the trustee in charge of the children’s (or other beneficiary’s assets) the sole discretion of when, if at all, to release any of the SPENDTHRIFT TRUST’s assets.  In Nevada, there is specific statutory provisions governing this kind of trust, which will likely be used as a guide when your estate plan is drafted.   

T – “T” stands for TRUST. A TRUST is generally (and ideally) a written set of instructions to a named individual or entity, such as a bank, or a law firm (“Trustee”) with regard to the assets held by the TRUST.  The person drafting the set of instructions, and who FUNDS the TRUST is called either a “Settlor” or a “Grantor”; these terms are used interchangeably.  A TRUST gains control of assets as a result of the grantor/settlor, transferring their property into the name of the trust. If the Grantor/Settlor fails to FUND their TRUST it will be ineffective to accomplish the intent of the Grantor/Settlor.  It is, therefore, vital that once a TRUST is drafted that assets be transferred into it. 

U – “U” stands for UNIFIED TAX CREDIT.   This is the amount total monetary value (currently $11,200,000) that each U.S. citizen subject to the tax laws of the United States can either gift or bequeath during their lifetime tax free.  At one time lifetime gifts were tracked separately from transfers at death, but were later consolidated (“unified”), which in at least that respect simplified tax planning and tax return preparation. 

To Be Continued................

Monday, May 7, 2018

A-Z of Estate Planning

P – “P” stands for PROBATE, which is the legal process by which property passes from a deceased individual to his or her heirs.  Unfortunately, the PROBATE process can take months, and even years (depending on the size of the estate and the number of challenges by potential heirs), and can be very costly, with legal fees potentially totaling tens of thousands of dollars. PROBATE is also a public process, which means your will, and what was left to every heir will become public knowledge.  For some people, this may cause little or no concern, but for those who wish for their private affairs to remain private, a trust is often a better choice.  

Q – “Q” stands for Q-TIP ELECTION.  This option is frequently used for individuals who have remarried and have children from a first marriage.  Essentially, the Q-TIP ELECTION establishes a separate trust for the benefit of the children or other class of final beneficiaries but allows the new spouse to receive the income earned by the Q-TIP TRUST for the remainder of their lifetime.  The surviving spouse is also allowed to live in the home owned by the Q-TIP TRUST during his/her lifetime.  Assets transferred into trust as a result of making a Q-TIP ELECTION will not be subject to estate tax until the second spouse passes away.  Of course, taxes will only be due if the value of the property in the Q-TIP TRUST added to the surviving  (new) spouse’s assets at the time of their death exceeds the exempt amount then allowed under the Tax Code.

R – “R” stands for REPORT.  It is vital to the effectiveness of your estate plan that you report any changes in your circumstances to your estate planning attorney.  These include: the purchase or sale of real property; a marriage or divorce; the birth of a child or grandchild and so forth. Failure to amend your estate documents in light of any of these events can have a significant impact on the overall plan. 

To Be continued............

Thursday, May 3, 2018

A-Z of Estate Planning

M – “M” stands for MARRIAGE. Perhaps more than any other single factor, MARRIAGE, RE-MARRIAGE, and DIVORCE (See, DIVORCE, above) can have a significant impact on the amount of taxes owing on an estate.  Under current tax law, a married couple can leave a combined estate of $22,400,000 and not be subject to estate tax. (This assumes the couple has not used any portion of their lifetime gift exclusion at the time of their respective deaths).  For an individual, that amount is cut in half.  RE-MARRIAGE, especially where there are stepchildren from a prior marriage, can require careful drafting of the estate plan to ensure children from the first marriage are not overlooked.

N – “N” stands for NEW TAX LAW.  As mentioned earlier, the tax law that took effect this year, and will remain in effect until the end of 2025, doubled the amount of an estate that will be subject to tax at an individual’s death.  This will have a significant effect on estate and tax planning during this time, and is anticipated to have a positive impact on the transfer of family businesses that have, in the past, faced difficulties passing the business to the next generation due to tax burdens.

O – “O” stands for ­OUT-OF-STATE-PROPERTY. If you own property outside the state where you establish your trust or where you reside, it is important, when funding the local trust with OUT-OF-STATE property that the deed transferring the property meets the requirements of recording where the real property is located.  If it does not, there is the risk that the property may end up in probate, rather than in your trust. 

To Be Continued ....................

Thursday, April 26, 2018

A-Z Estate Planning

J-"J" stands for Joint Ownership. A married couple who lives in a community property state will enjoy a step up in basis for a home they own jointly. For example, if a couple pays $100,000 for a home, and when the first spouse dies, it is worth $200,000, the living spouse's new basis in the home is now $200,000.  If she later sells it, and for some reason tax is owed, her taxable gain would be calculated using the $200,000 stepped-upped basis, thus saving money.  If however, a home is owned jointly by two people not married, the survivor could inherit the property under Nevada law without passing through the probate process: however, the survivor's basis would remain the original $100,000 from the earlier example; there would be no step-up in basis. This unfortunate outcome could be avoided with planning.

K – “K” stands for 401(k).  The term “401(k)” is a general term many people use to refer to their widely known by many people as the retirement program they have at their workplace.  The term itself is actually a section of the Internal Revenue Code that regulates employer-sponsored retirement plans that can qualify for special tax treatment if conducted according to the IRS Code and Regulations.  Your 401(k) retirement plan can play a very important role in your estate plan, but if handled improperly can have negative tax consequences for your beneficiaries.   For example, it is generally not a good idea to name your trust as a beneficiary of your 401(k) plan, but rather, simply name direct beneficiaries of your plan, and allow your trust to operate separately and control its assets separately.

L – “L” stands for LIMITED LIABILITY COMPANY (LLC).  Many individuals pass away as owners of an interest in Limited Liability Companies.  Depending on the operating agreement of the LLC, some or all of your interest in the LLC can be funded into your trust during your life.  There are certain procedures both at the LLC level and, perhaps, at the state level that will need to be followed to ensure this is done properly and with the greatest effect.

Thursday, April 12, 2018

A-Z Estate Planning

G-"G" stands for GENERATION SKIPPING TAX. When a person dies and transfers their assets to their heirs (traditionally, their children ) the government imposes a tax on that transfer, something usually called an estate tax.  Those children would then later transfer some or all of those assets to their children. When this occurred, there would be another transfer/estate tax imposed on the same asset, effectively, the same asset was taxed twice.  In an attempt to avoid this double tax, some individuals simply skipped the first transfer to their children and left some assets to their grandchildren instead, effectively "skipping a generation" and a level of tax.  The government caught on and imposed a tax on transfers that skip generations.

H-"H" stands for HEIR. When someone dies the person who is legally entitled to that individual's assets and property is the HEIR.

I-"I" stands for IRREVOCABLE, IRS,IRAs, and ILITs. An IRREVOCABLE trust is a special kind of trust that has serious implications, and should not be undertaken without seeking advice from an attorney and a tax advisor.  These kinds of trusts have their uses, but fit only a small fraction of the public.  The IRS governs the tax effects of the choices made in and through your estate.  Poor planning can result in wild swings in tax exposure (greater or lesser) of your estate.  Many, many people have IRAs. An Irrevocable Life Insurance Trusts, better known as an ILIT is a tool to pay off estate taxes by purchasing life insurance in the amount of the taxes estimated to be owing at the time of death.  In this way, the beneficiaries inherit most, if not all, the estate without having to pay tax from it.

To Be Continued......