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Ruggiero Law Blog

Friday, June 29, 2018

How a Prenuptial Agreement Can Protect Your Estate


There are many circumstances that can impact an estate plan, not the least of which is divorce. While ending a marriage is complicated, it is not only crucial to arrive at a fair and equitable distribution of the marital assets, but to preserve your estate as well.

While the laws vary from state to state, it is important to understand the difference between separate and marital property. Generally, separate property includes any property owned by either spouse before the marriage, as well as gifts or inheritances received by either party prior to or after the marriage.

Marital property, on the other hand, is any property that is acquired during the marriage such as houses, cars, retirement plans, 401(k)s, IRAs, life insurance, investments and closely held business, regardless of who owns or holds title to the property.
Read more . . .


Friday, June 15, 2018

Why Should I Incorporate my Small Business


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.
Read more . . .


Friday, June 8, 2018

Estate Taxes, Inheritance Taxes, and Trump's Tax Plan


While the terms "estate tax" and "inheritance tax" are often used interchangeably, they are not synonymous. Let's try to clarify the difference.

Estate Tax

Estate tax is based on the net value of the deceased owner's property.  An estate tax is applied to these assets when they are transferred to the beneficiary. It is important to remember that an estate tax doesn't have anything to do with the beneficiary or that person's resources.
Read more . . .


Monday, May 21, 2018

Should Trusts be a Part of your Estate Plan?

 

Many individuals are aware that a will is one way to plan for the distribution of their assets after death. However, a comprehensive estate plan also considers other objectives such as planning for long-term care and asset protection. For this reason, it is essential to consider utilizing an irrevocable trust.

This estate planning tool becomes effective during a person's lifetime, but it cannot be amended or modified. The person making the trust, the grantor, transfers property into the trust permanently. In so doing, the grantor no longer owns property, and a designated trustee owns and manages the assets for the benefit of the beneficiaries.

In short, irrevocable trust provide a number of advantages. First, the property is not subject to estate taxes because the grantor no longer owns it. Moreover, unlike a will, an irrevocable trust is not probated in court. Finally, assets are protected from creditors.

Common Irrevocable Trusts

There are a variety of irrevocable trusts, including:

  • Bypass Trusts -  utilized by married couples to reduce estate taxes when the second spouse dies. In this arrangement, the property of the spouse who dies first is transferred into the trust for the benefit of the surviving spouse. Because he or she does not own it, the property does not become part of this spouse's estate when he or she dies.

  • Charitable Trusts - created to reduce income and estate taxes through a combination of gifting and charitable donations.  For example, charitable remainder trust transfers property into a trust and names a charity as the final beneficiary, but another individual receives income before,  for a certain time period.

  • Life Insurance Trusts - proceeds of life insurance are removed from the estate and ownership of the policy is transferred into the trust. While insurance passes outside of the estate, it is factored into the value of the estate for tax purposes, so this vehicle is designed to minimize estate taxes.

  • Spendthrift Trusts – designed to protect those who may not be able to manage finances on their own. A trustee is named to manage and distribute the funds to the beneficiary or directly to creditors, depending on the terms of the trust.

  • Special needs trusts - designed to protect the public benefits that many special needs individuals receive. Since an inheritance could disqualify a beneficiary from Medicaid, for example, this estate planning tool provides money for additional day to day expenses while preserving the government benefits.

The Takeaway

Irrevocable trusts are essential estate planning tools that can protect an individual's assets, minimize taxes and provide for loved ones. In the end, these objectives can be accomplished with the advice and counsel of an experienced estate planning attorney.

 


Monday, April 23, 2018

What is a Revocable Living Trust?


There are many benefits to a revocable living trust that are not available in a will.  An individual can choose to have one or both, and an attorney can best clarify the advantages of each.  If the person engaged in planning his or her estate wants to retain the ability to change or rescind the document, the living trust is probably the best option since it is revocable. 

The document is called a “living” trust because it is applicable throughout one's lifetime.  Another individual or entity, such as a bank, can be appointed as trustee to manage and protect assets and to distribute assets to beneficiaries upon one's death.
Read more . . .


Wednesday, April 4, 2018

An Overview of Foundational Corporate Documents

There are a number of steps involved in forming a corporation from selecting a name, obtaining the necessary licenses and permits, paying certain fees, and filing foundational documents with the appropriate state agency. While an attorney can help prepare and file the required papers, the owners, officer and directors should have a basic understanding of these documents.

Articles of Incorporation

The first underlying document is the Articles of Incorporation which states the corporate name, and the  purpose of the business. This is typically a generic statement to the effect that the corporation will conduct any lawful business in the state in accordance with its objectives.  In addition, the type and amount of stock that will be issued (common or preferred) must be established. This document should contain any other pertinent information, including the name and address of a registered agent.

Corporate By-laws

By-laws are the formal rules regarding the day-today operations of a corporation. This document outlines the corporate structure and establishes the rights and powers of the shareholders, officers and directors. By-laws specify how officers and directors are nominated and elected as well as their responsibilities. In addition this document should clarify how disputes among the parties will be resolved. By-laws establish where and when meetings will be held, whether quarterly, annually or at other times, what constitutes a quorum, as well as voting and proxy rules. Lastly, this document should also contain information on the issuance of shares of stock and other operational details.

Meeting Minutes

After the corporate existence has begun, an initial organizational meeting of the principals must be held in order to adopt by-laws, elect directors, issue stock, and to conduct any other business. All of these activities must be memorialized in meeting minutes, which must also be prepared during any subsequent meetings.

Stock Certificates

Stock certificates are the record of any stock that was initially issued.

Once these foundational documents are in place, a corporation is also required to keep complete and accurate books and records of account and must maintain a record containing the names and addresses of all shareholders. All of these documents may fall under different names and the applicable laws vary from state to state. Because this is a complicated process and one that requires careful analysis, you are well advised to engage the services of an experienced business law attorney to help prepare and file the necessary foundational documents.


Tuesday, November 14, 2017

Gifting to Step-Children in your Estate

Today, blended families have become increasingly common, and many individuals have step-children, that is, children of a spouse or partner. In situations where step-children have not been legally adopted, however, they do not have a legal right to an inheritance from a step-parent. For those who wish to leave step-children part of their estate , it is necessary to include them in an estate plan.

The easiest way to leave gifts to step-children is to name them in a will. As with any other gift, they can be given a percentage of the estate, or specific gifts. If there are other children involved, it is important to avoid confusion by naming each child and step-child by using their individual names, rather than terms such as "descendants," "heirs," or "children."

There are also a number of estate planning tools that can be utilized to include step-children in an inheritance. If the objective is to avoid probate, for example, a revocable living trust can be established in which a step-child is named as a beneficiary. Moreover, it may be necessary to provide for a disabled step-child who is eligible for public benefits by establishing a special needs trust. Lastly, a step-child can also be named as a beneficiary in a life insurance policy or a pay-on-death financial account.

While there is no legal obligation to leave step-children an inheritance, it may be the best choice for those who have a close relationship, or played a significant role, in raising them. However, this will reduce the amount of assets available to other children and beneficiaries. Because blended family relationships are complex and subject to emotional challenges, it is important to explain these decisions with all family members.

By engaging in an open and honest dialogue, you can minimize the potential for strife and the possibility of a will contest. In particular, it is important to clarify why you gave each recipient a gift, the selection of your executor, and your thoughts about the family.  Lastly, you are well advised to engage the services of an estate planning attorney who can help ensure your wishes regarding step-children are carried out.


Wednesday, October 18, 2017

Create an IRA trust and leave a lasting legacy for children and grandchildren


 

 Join us at a seminar to learn how to: 

Achieve wealth accumulation 

Maximize income tax deferral 

Create divorce and creditor protection 

Provide a pension for a pensionless generation 

 

Tuesday, Oct. 24, 2017 7:30 to 9:00 am 

Breakfast Served 

Concord Country Club, Brandywine Room 

1601 Wilmington Pike, West Chester, PA 19382 

 

Begin Planning Now For a Lifetime. 

Read more . . .


Monday, August 7, 2017

Making Decisions About End of Life Medical Treatment.

Making Decisions About End of Life Medical Treatment

While advances in medicine allow people to live longer, questions are often raised about life-sustaining treatment terminally ill patients may or may not want to receive. Those who fail to formally declare these wishes in writing to family members and medical professionals run the risk of having the courts make these decisions.

For this reason, it is essential to put in place advance medical directives to ensure that an individual's preferences for end of life medical care are respected. There are two documents designed for these purposes, a Do Not Resuscitate Order (DNR) and a Physician Order for Life Sustaining Treatment (POLST).

What is a DNR?

A Do Not Resuscitate Oder alerts doctors, nurses and emergency personnel that cardiopulmonary resuscitation (CPR) should not be used to keep a person alive in case of a medical emergency. A DNR is frequently used along with other advance medical directives by those who are critically ill and prefer not to receive life sustaining treatment.

What is a Physician Order for Life Sustaining Treatment (POLST)?

A Physician Order for Life Sustaining Treatment is similar to a DNR,  however a POLST is prepared by a patient's doctor after discussing end of life treatment options. This is not a legal document prepared by an attorney, but rather a binding doctor's order that is kept with a patient's medical records. A POLST declares a patient's preference for receiving certain life sustaining treatments, as well as treatment options the patient does not want to receive or to be continued.

Examples of these treatments include, but are not limited to, artificial nutrition and hydration, intubation and antibiotic use. These decisions should be made when there is no medical crisis that can affect an individual's decision making, after various treatment options have been discussed with his or her doctor. In short, a POLST ensures that a patient will receive appropriate treatments, but not be subjected to life sustaining measures the patient does not want.

By having these advance medical directives in place, a person can have peace of mind knowing that he or she will receive end of life treatment according to his or her wishes, and loved ones will not be forced to go to court to obtain the right make these decisions.

 


Tuesday, July 18, 2017

Navigating the Elder care Maze



Navigating the elder care maze can be challenging for caregivers.

Listen to Jim Ruggiero live on WDIY radio 88.1 FM on Wednesday July 19th at 6:00 pm for discussion on the legal needs and care options available.  Joining Jim on the show will be: Theresa M. Kuhar, RN, BSN, Managing Director of IKOR Bucks & Lehigh.
Read more . . .


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