Articles Posted in ESTATE PLANNING

In El Cajon, there are many corporations. These are regulated by the California Department of Corporations. Our law firm of Law Office of Scott C. Soady, A Professional Corporation, LLP can incorporate your existing business or a new business. Please feel free to e mail or contact us for a free appointment. A corporation can also be part of your estate plan.

Following fast on the heels of a decision to go into a particular kind of business is the decision about what kind of legal form it should take. The most common options are a sole proprietorship, a partnership, or a corporation. You may lean toward the corporate route because you like the sound of having “Inc.” after the company’s name, but there are some more practical, business-like considerations to take into account.

More so than with some of the other structures for a business, starting a corporation means complying with formalities required by state laws. Once the shareholders (owners) of the business agree on some basic matters, such items are embodied in articles of incorporation that must be filed with the appropriate state agency. These essentials usually include:

In Rancho Penasquitos, many persons have investments. Our law firm of Law Office of Scott C. Soady, A Professional Corporation, LLP does not endorse or recommend any individual investments. We refer you to licensed professionals in that area such as Certified Financial Planners. Always make sure to independently verify license status and credentials. Many accounts, such as a 401K, may be part of an estate plan. Please feel free to e mail or call our office for any legal questions regarding your revocable living trust or other estate plan.

As of January 1, 2006, employers are able to offer a new retirement savings option, the Roth 401(k). The new account allows the features of a Roth IRA to be incorporated into the setting of a 401(k) account, but without the income restrictions that limit a Roth IRA. Contributions will be made with after-tax dollars, but the account will grow tax-free, and withdrawals taken in retirement will also be tax-free, assuming an individual is at least 59-1/2 years old and has held the account for at least 5 years.

Roth 401(k) accounts will be subject to the same contribution limits as regular 401(k)s. In 2006, this means a contribution limit of $15,000, or $20,000 for individuals 50 and over. The contribution limits apply to regular and Roth 401(k) plans combined, so, for example, an individual could not put $15,000 in a regular 401(k) and $15,000 in a Roth 401(k). Still, the opportunity to put more money into a retirement account that will have tax-free withdrawals will be enhanced, given that in 2006 the contribution limits for a regular Roth IRA will be $4,000, or $5,000 for those 50 or older. If an employer matches the employee’s contributions to a Roth 401(k), the matches will be made with pre-tax dollars in a regular 401(k) account that will be taxed as ordinary income at withdrawal.

Some residents of Rancho Santa Fe have more than one residence. Our law firm of Law Office of Scott C. Soady, A Professional Corporation, LLP can assist with insuring all of your properties are in your trust. The goal of a revocable living trust is to avoid probate fees and costs as well as insure privacy in the distribution. For tax planning issues, we recommend consulting a Licensed Certified Public Accountant. If you have any questions regarding estate planning or advanced estate planning strategies, please contact our law office for a complimentary consultation by e mail, phone or in person.

If you spend time in any given year in residences in different states, somewhere in your travels you also may want to schedule an appointment with your professional tax advisor. One topic for discussion would be the legal concept of domicile.

In simplest terms, a person’s domicile is the place where he or she intends to return after leaving another location. The special significance of where a domicile is established is in tax planning. An individual’s domicile determines which state’s income, gift, and estate tax laws apply, and in which state or states a person, trust, or estate is taxable. The rules that will govern the administration of an estate also depend on the state of domicile. Inadequate attention to establishing and documenting an intended state of domicile could mean that even the best-laid estate plan might go awry because the laws of a different state could apply. The end result could be an unexpected tax burden that otherwise could have been avoided.

In La Jolla, many families have children attending local colleges such as the University of San Diego, San Diego State University, University of California San Diego and many others. The costs of these colleges can be very expensive. Estate planning can assist in parents discussing college and other expenses for their children in the event they are deceased at the time the children enter college. Revocable living trusts can be used for funding college educations. Our law firm of Law Office of Scott C. Soady, A Professional Corporation, LLP would be pleased to offer you a complimentary and confidential consultation. Please e mail or call us. Our firm does not recommend or endorse any 529 plan or other financial instrument.

The steady rise in the cost of attending college may have become one of those few absolute certainties in life, along with death and taxes. Tuition and fees for public and private institutions alike can seem overwhelming, especially if parents have done little financial preparation ahead of time. Some solace can be taken in the fact that there is a wide variety of approaches for saving for college. For parents who have some foresight, the use of a plan that is tailored to their circumstances can at least soften the blow of financing a college education.

With mutual funds as the primary investment option, state 529 plans are best for those looking to contribute substantial amounts to a college fund. Earnings are tax-free, as are later withdrawals for qualified education costs. These plans generally are in the parents’ names, which means that the plans have minimal effects on the family’s eligibility for financial aid. The drawbacks are limited investment options and relatively high fees.

A prepaid tuition plan makes the most sense for families that are reasonably certain that their child will attend one of the schools in a state’s plan, and that are satisfied with a rate of return that equals the inflation rate for the costs of schools in the plan. Under prepaid tuition plans, you are buying future tuition at a state’s public colleges at today’s prices. On the downside, payouts from these plans reduce eligibility for financial aid on a dollar-for-dollar basis. In addition, states dealing with especially tight budgets have been raising the costs of participating, and in some cases have been temporarily closing off enrollment.

For a group of approximately 250 private colleges, there are independent 529 plans. They work like state prepaid plans, including the dollar-for-dollar reduction in financial aid eligibility when funds are distributed. Money from such a plan can be rolled over to a state 529 savings plan or a state prepaid plan without penalty.
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In Encinitas, many residents have as their greatest asset their house. Our law firm of Law Office of Scott C. Soady, A Professional Corporation, LLP urges you to have a revocable living trust and/or other estate plan to avoid probate fees and costs upon death. It is crucial to have title insurance since, if the land did not have clear title or had liens or other encumbrances, the value of your most treasured asset may not be what you think. In San Diego there are many title companies including Ticor Title Insurance, California Title Company and others. Our firm does not endorse or recommend any of these and they are used for illustrative purposes only. If you have a question about your estate plan or title insurance coverage issues, please e mail or call our office for a complimentary consultation.

When someone buys a home, in addition to the land, bricks, and wood, the buyer receives the legal title to the property. If the title is defective, it could interfere with enjoyment of the property and result in financial loss. When title insurance is purchased by a property owner, the insurer guarantees that the owner has clear title to the property, free of claims or encumbrances.

Title insurance begins with a search of land records tracing the property’s “chain of title” back in time through previous owners. A title search should reveal any legal documents that do not clearly pass title, such as where incorrect names or notary acknowledgments appear, as well as outstanding mortgages, judgments, or tax liens. Even a thorough search by an experienced title examiner cannot be absolutely certain to detect every problem, however. Title insurance protects against the unseen hazards that may not surface until long after property is purchased. Some of the risks against which title insurance gives protection include: a forged deed that transfers no title to the property; previously undisclosed heirs with claims against the property; and a legal document executed under an invalid or expired power of attorney.

In San Diego, there are many families which have a need for a family limited partnership. It is important to use a law firm which is experienced in these partnerships. Our firm of Law Office of Scott C. Soady, A Professional Corporation, LLP will be pleased to offer a complimentary and confidential consultation and please feel free to e mail or call us.

A family limited partnership (FLP), like other limited partnerships, is a form of business consisting of one general partner and one or more limited partners. In an FLP, however, the individuals involved usually are members of different generations of the same family. One of the advantages of a well-executed FLP is a reduction in federal estate and gift taxes. Instead of transferring assets directly to beneficiaries, an individual may transfer interests in a limited partnership. Since interest in an FLP is not marketable and since a limited partner does not control management of the enterprise, the value of interests in an FLP usually can be discounted by anywhere from 25% to 50%, with a corresponding reduction in tax liability.

As with many transactions among family members, the IRS has a history of casting a skeptical eye on FLPs. Essentially, the IRS is intent on assuring that the tax advantages of any particular FLP are not the be-all and end-all for its existence. If the FLP is deemed to be a sham, the IRS may challenge the valuation discount and perhaps even the very existence of the partnership.

In Del Mar, there are many businesses which offer retirement plans for employees. Some of these retirement plans may be included in a revocable living trust and others are not. Our law firm of Law Office of Scott C. Soady, A Professional Corporation, LLP practices in estate planning and family law. We would be pleased to offer you a complimentary consulation on which plans should [or should not] be included in your estate plan. Please e mail or call our office for a free in-house consultation.

The Internal Revenue Service has information that is designed to help small businesses establish and maintain retirement plans for employees. Sections on setting up contributions, investments, and distributions have information not only from the IRS, but also from the Securities and Exchange Commission, the Federal Deposit Insurance Corporation, and the Social Security Administration.

* Rules for traditional and Roth IRAs, as well as other retirement plans;

In San Diego County, many residents use credit cards from many different companies including American Express, MasterCard, Visa, Diners Club and many others. Our law firm of Law Office of Scott C. Soady, A Professional Corporation, LLP does not endorse or support any of these companies and these are used for illustrative purposes only. If you have a legal inquiry regarding estate planning or family law, please e mail or call our firm for a complimentary consultation.

In banking as in so many other areas, the trend is clear: We continue to move steadily away from traditional paper transactions toward high-tech means of conducting our business. It will not happen overnight, though, and even the most technophobic among us should be assured that there are some federal laws and regulations in place that will make the transition easier and more secure.

If your credit card is lost or stolen, your loss is limited to $50 per card. That is also the general rule for an EFT card or code, but with the important caveat that procrastination in reporting a lost or stolen EFT card or code can be much more expensive. The exposure limit jumps to $500 for a consumer who does not report the loss or theft within two days of learning of it. Not only that, but failure to report an unauthorized transfer within the 60-day period for doing so creates unlimited exposure to losses from transfers made after the 60-day period

In 4S Ranch, there are many residents who need an estate plan. Our law firm of Law Office of Scott C. Soady, A Professional Corporation, LLP is located in Rancho Bernardo and offers a free in-house consultation. Please feel free to e mail our office or call for an appointment. The laws changed constantly so make sure to contact us for the latest laws regarding gift tax, estate tax and other estate planning issues!

The wisdom of making a will is well settled as sound legal advice, and rightly so. Less talked about, but equally advisable for many people, is the use of gifts during one’s lifetime as a method for estate planning. Apart from the intangible benefits that flow from the fact that, as the saying goes, it is more blessed to give than to receive, gifting has favorable down-to-earth, dollars-and-cents ramifications. Our firm recommends a revocable living trust for most clients.

Gifts reduce the size of the donor’s estate that will be subject to court administration, thereby cutting probate costs and potential estate tax liability. Less obvious, but equally advantageous, is the way that gifts can provide savings on income taxes. This occurs when income-producing property is given by an individual in a high income tax bracket to someone in a lower tax bracket.

Our firm of Law Office of Scott C. Soady, A Professional Corporation, LLP does not give financial or tax advice. Our estate planning services will include, in many case, the use of a Certified Public Accountant. If you have any questions regarding your estate plan and any potential capital gains, please feel free to contact us for a complimentary estate planning consultation. You can call or e mail our law firm.

The Internal Revenue Service has issued its final rules on the capital gains tax exclusion that is available on the sale of a taxpayer’s principal residence. A taxpayer may exclude up to $250,000 from the sale of a principal residence, and the exclusion doubles to $500,000 for married taxpayers. However, the taxpayer must have owned and used the property as a principal residence for a total of at least two of the five years before the residence is sold.

The final rules focus on the part of the Internal Revenue Code that allows a taxpayer who fails to meet the above condition to still have an exclusion in a reduced amount. There are three grounds for claiming a reduced exclusion: change in employment, health, and unforeseen circumstances. For each of these grounds, the regulations provide a general definition and one or more “safe harbors”–specific reasons for the sale of the residence. If the safe harbor for a particular ground applies, a sale (or exchange) is deemed to be “by reason of” that ground. If no safe harbor applies, the taxpayer still can claim one of the grounds on the basis of all of the surrounding facts and circumstances.