12August
2019
Getting Married? Issues to Consider When Purchasing Property Before the Wedding

Let’s say a couple is engaged to be married. However, before the marriage ceremony, the couple decides to purchase a marital home. Possibly, they want to buy a first house, condominium or cooperative apartment. Prior to doing so, there are certain potential concerns to address. The options for purchasing the property vary: One party may want to provide the down payment. The couple may decide to buy the home with title in one name only. They may decide to purchase it together with both names on the title but one person out the mortgage. With these and other scenarios, the couple…

12August
2019
Accounts Receivable Fraud: Lapping Up Profits

The sale has been made, the customer has paid, yet the company receives no revenue. How can this happen? Accounts receivable fraud, commonly referred to as “lapping,” occurs when an employee is entrusted with processing customer payments but then steals the money for his or her personal needs. Once a lapping scheme begins, subsequent checks are used to cover the missing checks. The employee generally must continually monitor accounts so he or she can steal from one customer to pay others. Depending on the volume of checks received, a lapping scheme can be initiated and maintained over a number of…

12August
2019
Remember Business Basics When Paying Relatives

Paying family members wages, salaries and bonuses and dividing profits among them can be tricky.   Fringe benefits, including deferred profit-sharing plans, pension plans, insurance programs and stock purchase plans offer an excellent means to compensate family members and, at the same time, help them build personal assets. Keep in mind that certain fringe benefits are taxable and some perks cannot be provided on a discriminatory basis — just to shareholder-employees of the business — without providing them to all employees. Consult with your tax advisor for more information.     It’s not uncommon for some employees to feel they’re…

25July
2019
Consider a Qualified Personal Residence Trust for Your Vacation Home

Do you own a beach house, ski chalet, resort condo or other vacation getaway? Perhaps it’s the place where cherished family reunions take place with your children and grandchildren. Many people with second homes want them to stay in the family but also want to limit estate and gift taxes upon their transfer. One way to achieve this might be to create a qualified personal residence trust (QPRT). With a QPRT, you basically transfer ownership of your personal residence or vacation home to a trust while you retain the right to use the property during the trust term. After that,…

25July
2019
Go It Alone with a 401(k) Plan

If your business is essentially a one-person operation, there’s an option to help you save more money for retirement: The Solo 401(k) plan. Ordinarily, traditional defined contribution retirement plans allow annual contributions that are limited to either 25% of salary if you’re employed by your own S or C corporation or 20% Tax Year Under Age 50 Over Age 50 2019 limit on elective deferral contributions $19,000 $25,000 2019 limit on combined elective deferral and employer contributions $56,000 $62,000 of self-employment income if you operate as a sole proprietor or single member LLC. Also, traditional profit sharing plans, Keogh or…

25July
2019
Estate Planning for Personal Property: Why You Should Sweat the Small Stuff

When planning their estates, most people focus on major assets, such as business interests, real estate, investments and retirement plans. But it’s also important to “sweat the small stuff” — tangible personal property. Examples include automobiles, jewelry, clothing, antiques, furniture, artwork, photographs, music collections, personal papers, collectibles (such as stamps, coins or baseball cards) and mementos. Ironically, these personal items — which often have modest monetary value but significant sentimental value — may be more difficult to deal with, and more likely to result in disputes, than big-ticket items. Distributing $4 million in stock or other liquid assets among your…

11July
2019
Appraising Your Company’s Appraisers

Let’s face it — employee performance appraisals are a chore, can seem confrontational and take time that managers would rather spend on more pressing demands. Sometimes managers rush through them and the results can be sloppy and useless, both to the employee and the company. Then again, your managers are only human and may find it difficult to separate personal feelings from professional opinions. If you’re worried about the accuracy of your staff’s performance appraisals, bring in some extra muscle by finding some secret shoppers. Finding secret shoppers is easy: You can recruit colleagues in your personal network or ask…

11July
2019
Watch the Language in Employee Handbooks

Your company needs an employee handbook or personnel manual to ensure that everyone understands the policies, procedures and rules. But improperly drawn, a handbook or manual can create a binding obligation that can be used against you. What you don’t want is for the documents to be interpreted as an employment contract. Keep that in mind when crafting handbooks so you lower the risk of running into unwanted legal hassles. Here is a list of Dos and Don’ts: Don’t use phrases such as “permanent position” or “the company promises.” There should be no statements that you don’t intend, or may…

11July
2019
Why You Need a Buy-Sell Agreement

If you co-own a business with other family members, it’s generally a good idea to have a well-drafted buy-sell agreement to protect everyone’s interests. Here are some basics about this important document, including the valuation methods used. A Buy-Sell Agreement Can: Transform your closely held business ownership interest into a liquid asset. Save taxes. Prevent unwanted changes in ownership. Warning: Ensure that provisions of your buy-sell agreement don’t conflict with existing provisions of a company’s organizational documents — its articles, bylaws, partnership agreement or Limited Liability Company operating agreement. There are two basic varieties of buy-sell agreements. The first type…

27June
2019
A Bucket Plan to Go with Your Bucket List

The Baby Boomers have re-defined everything they’ve touched, from music to marriage to parenting and more lately what “old” means — 60 is the new 50! Longer, healthier living, however, can put greater stress on the sustainability of retirement assets. There’s no easy answer to this challenge, but let’s begin by discussing one idea — a bucket approach to building your retirement income plan. The Bucket Strategy Can Take Two Forms       1. The Expenses Bucket Strategy. With this approach, you segment your retirement expenses into three buckets: Basic Living Expenses — Food, Rent, Utilities, etc. Discretionary Expenses — Vacations,…

27June
2019
Contract Jurisdiction: Where Will a Dispute Be Heard?

Years ago, many companies dealt with vendors, suppliers, customers and others that were located in the same geographic area. Today, it’s not unusual to engage in transactions with entities in multiple states and even numerous countries. The Internet has made the business world a small place. While doing business outside your area may open up new lucrative markets, it can also make your company vulnerable to a potential trap. When signing contracts, pay attention to clauses that lay out the “choice of law” and “venue.” These clauses state what law applies and the location where disputes related to the contract…

27June
2019
Four Reasons Millennials Need an Estate Strategy

You’re young, have little in savings and likely have no one yet relying on you financially. So why do you need to think about estate management?¹ Here are four great reasons: Estate Strategies: They Not Just for Old People You need a will. You may ask why a will is important if there’s not much to pass on. A will is not just about transferring assets. It can be used to accomplish other tasks, such as who should manage your social media accounts once you’re gone, or inherit items you’ve accumulated, like collectibles or your car. Don’t burden others with…

13June
2019
Help Prevent Invoice Fraud at Your Business

When a supervisor with Burlington Northern Santa Fe Railway stumbled upon a way to submit fraudulent invoices to his employer, he enlisted several others in the scheme. In the end, more than $2 million in bogus or inflated invoices (details of the case are in the right-hand box) were submitted. How the Fraud Worked Two Kansas men pleaded guilty in 2010 to conspiracy to commit wire fraud against Burlington Northern Santa Fe Railway (BNSF). Matthew Wyrick, 35, and his father-in-law, Robert Steele, 64, were charged with various offenses related to BNSF, where Wyrick was employed as a supervisor in the…

13June
2019
Advantages and Disadvantages of Roth IRAs

Saving for retirement is critical to financial security. Fortunately, the government provides some tax incentives, if you qualify.  Even though Roth IRAs have been around for more than a decade, many people are not aware of exactly how they work. They also may not know that there are no longer income restrictions in place to convert a traditional IRA into a Roth. If you qualify, you can make a contribution to a Roth IRA of $6,000 in 2019 or $7,000 if you are age 50 or older (up from $5,500 in 2018). Here are the basic advantages and disadvantages of…

13June
2019
Consider Hosting a Family Meeting about Your Estate Plan

If you’re a business owner and a high-net-worth individual, you may want to gather your family members together to discuss the details of your estate plan. This can be especially important if you own a business that employs family members. These meetings are a little like the Scottish clan gatherings held hundreds of years ago by clan chiefs to discuss their succession and inheritance plans. The Purpose of Gatherings For centuries, some Scottish clans had a tradition of getting together periodically. When communication and travel were difficult, these gatherings provided a way to prepare for the future. Estate planning was…

30May
2019
The Benefits of Charitable Remainder Trusts

A charitable remainder trust (CRT) is an irrevocable trust set up to benefit a charitable organization. The trust’s term is one lifetime, several lifetimes, or a period not to exceed 20 years. Basically, you irrevocably gift an asset to the CRT, usually an asset with a low tax basis that has appreciated significantly. During the trust’s term, you receive a certain amount of income and/or capital annually (called the retained interest). At the trust’s termination, the charitable organization receives the remaining assets (called the remainder interest). CRTs offer several benefits: Since the trust is a tax-exempt organization, the CRT can…

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