Share

Round Rock, TX Attorney Blog

Monday, November 28, 2016

Gun Trusts Allow Owners More Control, Easier Transfers


Earlier this year, an 1886 Winchester rifle became the most expensive gun ever sold when it was bought at auction by an anonymous bidder for $1.265 million. The gun was extremely desirable to collectors because of its storied history and low serial number.

Its original owner was U.S.


Read more . . .


Monday, October 31, 2016

Special Needs Trusts Help Prevent A Horrible Situation


Imagine a situation where someone inherits a money or a home after the death of a loved one and it ruins their life. This may sound like the set-up for a B-level comedy, but it is actually a horror story that plays out for many people with special needs.

To be clear, leaving money or other assets to someone with special needs (such as mental or physical disabilities) is not in and of itself a bad idea. The sentiment behind the action is admirable. It is how the transfer of assets is done that actually causes problems.


Read more . . .


Monday, October 31, 2016

Updating Your Estate Plan During A Divorce


Back in the mid-1990s, Texas’s own Mark Chesnutt had a hit on his hands. “Goin’ Through the Big D” is a surprisingly catchy tune about man who is going through a divorce who is frustrated that the judge gave his soon to be ex-wife everything they owned except the Jeep. One thing the song doesn’t talk about (probably because it doesn’t rhyme with enough stuff) is the man in the song’s estate plan.

Updating your estate plan is one of the first things you should do once you file for divorce. Most couples name their beloved as the person who should inherit the bulk of their estate and decide if and when to pull the plug should a health tragedy strike.


Read more . . .


Sunday, September 25, 2016

How Buy Sell Agreements Can Protect a Small Business


Is it necessary for small business owners to put a buy sell agreement in place?

Small business owners have a number of important considerations to make even before the enterprise is launched including selecting the appropriate business structure, securing the use of a name, obtaining the necessary licenses, and completing the required state filings. In addition to these concerns, it is crucial to create agreements among the owners and partners, none the least of which is a buy sell agreement.

Buy Sell Agreements at a Glance

A buy sell agreement is designed to clarify the redistribution of ownership interests if one of the partners or owners dies. These agreements can also handle other unplanned events such as disability and bankruptcy or divorced. In short, putting a buy sell agreement in place allows the partners/owners to redeem the stake of an a deceased or departing owner.


Read more . . .


Sunday, September 25, 2016

Elder Abuse and Invasion of Privacy on Social Media


Q: What level of privacy and care are nursing home residents entitled to from their caregivers?

When the time comes to place a loved one in a nursing home it’s difficult under the best circumstances-- even if the person expressed this wish to their estate planning attorney. Fortunately, with skilled


Read more . . .


Monday, August 29, 2016

How to calculate estate tax

In order to predict how much your estate will have to pay in taxes, one must first determine the value of the estate. To determine this, many assets might have to be appraised at fair market value. The estate includes all assets including real estate, cash, securities, stocks, bonds, business interests, loans receivable, furnishings, jewelry, and other valuables.

Once your net worth is established, you can subtract liabilities like mortgages, credit cards, other legitimate debts, funeral expenses, medical bills, and the administrative cost to settle your estate including attorney, accounting and appraisal fees, storage and shipping fees, insurances, and court fees. The administrative expenses will likely total roughly 5% of the total estate. Any assets that is bequeathed to charity through a trust escapes taxation, and the value of those assets must be subtracted from the total. Any assets transferred to a surviving spouse are not subject to taxation as long as your spouse is a US citizen.

If the net worth of an estate is less than the Federal and state exemptions, no taxes must be paid. However, the value of assets over the exemptions will be taxed. The amount over the exemptions is referred to as the taxable estate. A testator’s assets are taxed by the state in which the will is probated. Taxes paid by the estate to the state may be deducted for Federal tax purposes. The Federal exemption was $5.43 million in 2015 and is slated to increase in 2016. The top Federal estate tax rate in 2015 was 40%.

If an estate earns money while it is being administered and distributed, for example, if real estate is rented or businesses continue to operate, it will be necessary for the estate to complete a tax return and pay taxes on the income it receives. The net income of the estate can be added to the taxable portion of the estate if it is over the federal or state exemption. It is important to be aware that the laws surrounding estate taxes change frequently and require seasoned professionals to navigate, and to notify you if changes in the laws will affect your estate plan. 


Sunday, August 21, 2016

You Won’t Rest in Peace if Your Will is Drafted Incorrectly


If the language in my will doesn’t match my intentions, will my assets be distributed in an manner that’s against my wishes?

For some people, the idea of making a will is so unsettling that it actually prevents them from having one created. Yet once the reluctant ones get their affairs in order, they often experience great peace of mind knowing they’ve taken care of their loves ones.

Planning your estate forces you to face your own mortality and make some difficult decisions. Depending on your particular family and financial situation, some of these decisions may include how to distribute your assets, who to select as guardians of minor children, and who to name as trustees of trusts created for the benefit of your beneficiaries. And that’s just the tip of the iceberg.


Read more . . .


Sunday, August 21, 2016

Estate Planning for Asset Protection


What are some simple steps to take to protect my assets?

In protecting your assets, the same rule applies as in investing, gambling, and even budgeting: aim to keep your winnings. It is also important to start thinking about estate planning early in your life, come up with as simple a plan as possible, and not to attempt to hide your assets from your creditors (including ex-spouses). After all, there is no up-side to ending up in jail.

The following steps give you the best opportunity to protect your estate from potentially large losses. Most people think about asset protection when they are feeling flush; you should also take the time to consider the topic when you are going through difficult, and perhaps costly, times.


Read more . . .


Monday, August 15, 2016

Why Should I Incorporate my Small Business?

Not every small business needs to form an LLC in order to function. A child selling lemonade by the side of the road has no use for a Tax ID number. It doesn’t seem practical to set up a new business entity to host a garage sale or a Tupperware party. As a venture starts to grow from a hobby to a full-time job, however, there are questions every business owner should ask to determine whether it is best to incorporate the business into a legal entity.

Do I need to protect my personal assets?

The greater the risk of being sued, the more necessary it becomes to file the necessary paperwork to form a Limited Liability company. This will limit the owner’s financial liability to the assets invested in the business. This means that, if a business gets sued, the business owner’s personal assets, like his or her home, automobile, personal bank accounts, and belongings, may not be targeted by the lawsuit. Common lawsuits of concern are for the satisfaction of contracts and leases and personal injury claims for accidents on the premises. Similarly, a bank may not seek a business owner’s assets to repay a loan unless the business owner signs a personal guarantee. Banks often require such a guarantee for new businesses that have no credit history.

Do I need flexibility in my obligation to pay income taxes?

A C corporation, which is a type of Limited Liability Company, has the flexibility to shift the business’s tax burden from one year to another. Normal business expenses and salaries can be deducted from a business’s taxes that may ultimately reduce a business owner’s tax burden depending on the income he or she derives from the business and from other sources.

Do I need to protect my company name?

In most states, companies register their names with the state to ensure that only one business can operate under that name. This is important for branding and marketing purposes. Adding LLC to the end of a company’s name can also add legitimacy to a new business, thus enhancing the brand.

Do I want to sell all or part of the business?

Ownership of an LLC or corporation can be shifted easily compared to those of a sole proprietorship. Adding partners and selling the business can be difficult if there are no lines between where the business ends and the owner begins. Once a business is incorporated, it lasts until it is dissolved, meaning it continues to be an asset for a business owner’s estate after the individual passes on.


Monday, August 8, 2016

Why shouldn't I use a form from the internet for my will?


In this computer age, when so many tasks are accomplished via the internet -- including banking, shopping, and important business communications -- it may seem logical to turn to the internet when creating a legal document such as a will . Certainly, there are several websites advertising how easy and inexpensive it is to do this. Nonetheless, most of us know that, while the internet can be a wonderful tool, it also contains a tremendous amount of erroneous, misleading, and even dangerous information.

In most cases, as with so many do-it-yourself projects, creating a will most often ends up being a more efficient, less expensive process if you engage the services of a qualified attorney.  Just as most of us are not equipped to do our own plumbing repairs or automotive repairs, most of us do not have the background or experience to create our own legal documents, even with the help of written directions.
Read more . . .


Monday, July 25, 2016

The Rule against Perpetuities

The law allows a person preparing a will to have almost complete control over his or her assets after the testator passes on, but there are limits to such power. A person can restrict a property from being sold, or make sure that it is used for a specific purpose. A property can be bequeathed to a family member as long on condition that the person maintains the family business in a specific city, or exercises daily, or places flowers on the deceased's grave every week, or engages in any other behavior the testator desires. This freedom, however, is not without limits. The time limit on this ability is called the rule against perpetuities. The rule is also referred to as the “dead man’s hand” statute.

The rule against perpetuities is complex and rarely utilized. At the time of the passing of the testator, the heirs of the estate are locked in. These heirs are referred to as “lives in being.” For the purposes of this rule, if a child is conceived but not yet born at the time of the testator’s death, it will be considered a life in being. Once the last living heir named in the will passes away, the restrictions on the property will continue in place as the testator desired for 21 years. The idea is that a testator may control his assets for a full generation after his or her death. The rule is notoriously difficult to apply properly. When it does apply, the conditions on the bequest are abandoned and the gift returns to the residual estate.

What makes this rule so confusing is that, when an individual writes a will, he or she may make gifts to potential children or grandchildren. These children and grandchildren, however, may not be born until years later. If a child has been born at the time the decedent passes away, he or she is subject to the restrictions on the bequest during his or her lifetime. If a grandchild is conceived and born after the decedent’s death, however, the child may avoid the restrictions 21 years after the death of the last heir alive at the time of the decedent’s death. There is no way to predict when this might occur. The rule is archaic and easily avoided. A knowledgeable attorney can help a person planning his or her estate set up an equitable trust. Similar to a will, a trust may impose conditions on the use of assets, but is not subject to the rule against perpetuities. There are other advantages to a trust, but one of the most important is avoiding this unpredictable and confusing rule.


Archived Posts

2017
2016
December
November
October
September
August
July
June
May
April
March
February
January
2015
December
November
October
September
August
July
June
May
April
March
February
January
2014


Estate Planning and Elder Law News



© 2017 Gerald Winters, P.C. | Disclaimer
1000 Heritage Center Circle, Round Rock, TX 78664
| Phone: 512-270-3807

Estate Planning | Elder Law | Tax Law | Business Law | | Attorney Profile

Law Firm Website Design by
Amicus Creative