12 April

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Pros and Cons of a Revocable Transfer on Death Deed for California Residents

The California legislature enacted a law in 2016 that offered residents an alternative to keep their homes out of the costly and inefficient probate process. This alternative is known as a “revocable transfer on death deed.” This type of deed is sometimes referred to as the “poor man’s trust.” Why? Because it is a less costly way to transfer real property to a named beneficiary without having to create a full-fledged trust. Limitations to a Revocable Transfer on Death Deed There are some limitations associated with transferring real property through this type of deed. For example, the only forms of real property that qualify for a transfer through this deed are (i) a single-family home or condo unit, (ii) a single-family residence that sits on agricultural property of 40 acres or less, or (iii) the residence has no more than four residential dwelling units. Advantages of a Transfer on Death Deed There are many advantages associated...

11 April

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Dying with Debt – Who Is on the Hook to Pay It Back?

Posted by Bobby Feisee

in Bobby's Blog

Debt is something many American grapple with. In fact, the average U.S. household with credit card debt carries close to $7,000 in revolving balances, or balances carried from one month to the next, according to NerdWallet. Given the prevalence of debt in our society, an important question needs to be answered: "If you die with an outstanding debt (whether it be a credit card, personal loan, student loan, mortgage, etc.) who or what will be responsible for paying it back?” The laws pertaining to debt after death vary by state so there isn't a single answer to this question. Nevertheless, in general, people do not inherit a loved one’s debt. For example, a son or daughter would not be responsible for the debt of a parent, unless they cosigned a loan. An exception to this general principle is in states that have “filial responsibility” laws related to children of aging seniors. Can I Just...

11 January

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Natural Burial – Is it Right for You?

Posted by Bobby Feisee

in Bobby's Blog

As we learn more about the environmental impact of metal caskets and traditional forms of burial, many people are opting for “green” or “natural” burials. These are burials where no chemicals are used at any stage of the burial. This means no embalming fluid is placed in your body, no vault, and no metal casket. Some natural burial services place a body into the ground wrapped in a shroud or placed inside a non-treated and biodegradable coffin. Are Traditional Burials Harming the Environment? The growing popularity of natural burials has been associated with the growing body of evidence highlighting the potential environmental impact associated with a traditional burial where a body is embalmed and placed into a metal casket. Embalming involves filling a body with formaldehyde, phenol, methanol, and glycerin. Formaldehyde is a potential human carcinogen, and can be lethal if a person is exposed to high concentrations, according to Business Insider. In...

22 October

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Profits Interest – Info You Need to Know

Posted by Bobby Feisee

in Bobby's Blog

You’ve probably heard of “stock options” that enable an individual to buy into a company at a future time. However, if you work for a limited liability company (LLC), you also have the option of utilizing a unique form of equity compensation known as “profits interest” which represents an actual current ownership interest in the LLC. Tax Free Equity Compensation A profits interest, when structured to be in compliance with relevant IRS “safe harbors,” is effectively tax free for the recipient, according to a great article published by Hutchison PLLC. This is because a profits interest basically represents an ownership interest in the future growth of the company but not an interest in the current value of the company. Example of How a Profits Interest Works Let’s say an LLC has three owners. Each owns one third of the company. Then, the company grants a 10 percent profits interest to an employee at a time...

22 October

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Administering a Small Estate in Virginia – Important Info You Need to Know

Posted by Bobby Feisee

in Bobby's Blog

Virginia has a set of unique rules that allows you to avoid probate if an estate is comprised of “small” assets (defined as assets totaling under $50,000). According to VA Code § 64.2-601, when the total estate does not exceed $50,000, a successor in interest, usually an heir-at-law or a beneficiary of the Will, can collect and distribute the assets without having to go through the full probate process. If there is a Last Will and Testament, it must be admitted to probate, but there is no requirement that an executor or personal representative be appointed, according to the Virginia Academy of Elder Law Attorneys. This is known as “recording” a Will. To claim assets without being appointed executor or personal representative, the person collecting the assets must provide an affidavit signed by all the lawful successors in interest (usually the heirs-at-law or the beneficiaries under the Will) stating the following: The total estate,...

17 October

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Info You Need to Know About Moving Your Business Domicile To A Different State

Posted by Bobby Feisee

in Bobby's Blog

If you decide it makes sense to relocate your company from the state of formation to a different state, there are a series of steps that must be taken in order to change the company’s domicile. This process is known as domestication. You are able to change the domicile from any state, but can only domesticate to a state that recognizes domestication. Benefits of Domestication The benefits of domestication include keeping the same tax ID (EIN), the same company structure, and with some states also the original date of formation. The disadvantage is cost and relative complexity of the process, compared to such alternatives as foreign qualification. The Process To change your company’s domicile, you must first be in good standing with the original state of registration. If your company is not in good standing, you need to first bring it to good standing by completing the necessary filing paperwork and paying specific fees....

17 September

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Which Small Businesses Get the 20 Percent Deduction?

Posted by Bobby Feisee

in Bobby's Blog

When tax reform legislation was signed into law, a 20 percent deduction for owners of a variety of pass-through businesses, including limited liability companies, partnerships, so-called S corporations and sole proprietorships was created. The deduction effectively lowers a small business owner's top rate to 29.6 percent from 37 percent. However, when the legislation passed, there was ambiguity as to which "small businesses" would qualify for the preferential tax treatment. Well, the Treasury Department recently issued guidance that helps bring some clarity to this issue. Those Who Qualify for the 20 Percent Deduction The deduction can be claimed by business owners whose taxable income is $315,000 or less if you file your taxes jointly, according to a fantastic article published in the Wall Street Journal. This means owners of partnerships, S corporations, limited-liability companies (LLCs) and sole proprietorships with taxable income of $315,000 or less can get the 20 percent deduction for joint filers....

17 September

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The Importance of a Health Care Directive

Posted by Bobby Feisee

in Bobby's Blog

As we age, there is a risk that our mental faculties will decline substantially or we'll suffer a sudden, unexpected health issue that leaves us incapacitated and unable to make important healthcare decisions. I've confronted this harsh reality with members of my own family. My father developed Alzheimer's and got to the point where he needed someone to step in and making important decisions on his behalf. Another tragic example is the mental decline of comedian Tim Conway, famous for his role on "The Carol Burnett Show." Conway was diagnosed with dementia and is "almost entirely unresponsive," according to MSN News. It does not appear that a health care directive was in place, which has spurred a rancorous legal battle between Conway's wife and his daughter about the quality of his medical care. These unfortunate situations highlight the importance of having a detailed health care directive in place. You can have a...

21 August

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The Power of Being an Organ Donor

Posted by Bobby Feisee

in Bobby's Blog

When it comes to planning your estate, an important issue that needs to be addressed is what you want done with your body when you pass away. Do you want to be embalmed and buried? Do you want to be cremated? Relatedly, you need to answer this important question – do you want to donate your organs? You are not required to donate your organs and, at the end of the day, it is your decision. Nevertheless, it is important to understand the potential impact you can have on other people’s lives if you decide to become an organ donor. For example, more than 120,000 people within the U.S. are currently waiting for a life-saving organ transplant, according to Mayo Clinic. Unfortunately, many people waiting for a transplant never receive the organ they need and die as a result. This is where you can enhance your legacy by allowing your organs...

23 July

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Effective Management of Your Online Assets Critically Important for Your Digital Estate Plan

Posted by Bobby Feisee

in Bobby's Blog

Ask yourself - what will happen to your Twitter account when you pass on? What about your Facebook account and Pinterest Board? What about your photos shared on a variety of social media platforms? These are important questions that need to be answered when planning your estate because your digital assets need to be part of that plan. Think about this - between 2012 and 2014, humans generated more data than in all of human history and the pace of that growth is only accelerating. Law Needs to Catch Up with Groundbreaking Technology There is an established set of laws for managing hard copy documents and other physical property (e.g., real estate, automobiles, etc.) when someone passes on. However, laws and regulations concerning the effective management of digital assets is far more vague. Courts have only recently began attempting to figure out how to handle assets based on digital technology. Trend in the Courts Leaves Individuals...