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10 Step Checklist For Estate Planning
It’s never too early to do estate planning. According to the CDC, more than 130,000 people died in accidents in 2013. That figure doesn’t even count gun deaths, victims of crimes, and illnesses. Not only should make sure you have a plan in place for your untimely and unlikely demise, you need to take the right measures to ensure your wishes are understood and carried out.
Here’s how you can get started:
Step 1: Make an inventory of your valuables
Make a list of everything you own with a value of $75 and up. This will typically include kitchen appliances, electronics, Jewelry, cars, guns, and assorted valuables.
Once the tangible items are listed, begin listing down other assets such as bank accounts, insurance policies, 401k plans, healthcare plans, and all other financials under your name.
Step 2: List down all your debts
Make a list of all your credit cards and debts. This typically includes mortgages, auto loans, and any debts in your name.
Step 3: Finalize and distribute assets lists
With your lists completed, add a date, make 3 copies and sign all of them. Distribute your assets list to your estate administrator, your spouse, and keep one copy for yourself stored in a safe location.
Step 4: Confirm retirement and insurance accounts policies
Retirement accounts like your 401k and insurance accounts list down your beneficiaries through their own contracts and act on them at the time of your death. These beneficiaries take precedence over your will so make sure to check all your accounts with your administrator so you can review all your accounts. We recommend that you Consult with a Queens Ledger approved estate lawyer See if all your beneficiaries are exactly who you want.
Step 5: Consolidate all your retirement accounts and policies
If you’ve worked different jobs over the years, you may have multiple 401k plans or IRA accounts open with previous employers. By consolidating all these accounts, you increase your control, expand your investment options, and minimize your paperwork.
Step 6: Assign all Transfer-On-Death destinations
Your bank accounts and brokerage accounts will be subject to probate by default. Probate is the court process which will determine how your assets will be distributed. It is expensive and may take a long time. This can be avoided by contacting your bank and requesting a TOD feature on your accounts.
Step 7: Find a reliable estate administrator
An estate administrator will be responsible for fulfilling your will at the time of your death. Ideally, this person is somebody not emotionally attached to your family or your beneficiaries and is responsible enough to be trusted with your will. Step 8: Make or update your will
If you don’t have a will yet, you can go to your lawyer and have him help you do it for a fee or you can follow one of the many templates available online. Your will should always be kept up to date. You must include the date and your signature each time along with the signatures of 2 witnesses. Have the final draft of your will notarized; send a copy to your estate administrator, and keep copies of it for yourself stored in a safe place.
Step 9: Review all your plans
As life goes on, your assets and your inventory list will change. Review your will once a year or whenever you go through life-changing events e.g.divorce, childbirth, death in the family, etc.
Step 10: Seek professional legal advice
If you haven’t already, go to an estate planning attorney and review your estate plan together. Your attorney may find holes in your plan and patch them up. A lawyer will also be a big help in adding things in your plan that would suit your specific needs.
Business Taxation: the Difference between ‘S’ and ‘C’ Corps
When filing taxes as a business, an entity can be taxed as a type ‘S’ or a type ‘C’ kind of corporation. By default, businesses are taxed as a ‘C’ Corporation. A business has to file form 2553 to the IRS to declare that the shareholders of the company want to be taxed under this scheme. So how do these tax systems affect the way businesses do taxes?To make the point as succinct as possible, a ‘C’ type corporation will pay the corporate income directly and their shareholders will have to pay taxes on their shares as well. They end up paying taxes twice. Whereas in an ‘S’ type corporation, the shareholders are taxed accordingly based on their returns and where they are in the income bracket. Each of these types have their own advantages and disadvantages. Only a qualified business incorporating attorney at law can help you decide if an S or C corp is right for you. With that said here is the breakdown:
Levels of tax – a ‘C’ corporation needs to pay taxes for its earnings and its shareholders will have to pay taxes again when the corporation distributes dividends to them, whereas in ‘S’ corporations, only the shareholders are taxed based on their earnings.
Deduction of losses – ‘S’ corporation shareholders may deduct their share of the corporation’s losses on their tax returns during the year it occurs. In a ‘C’ corporation it only offsets the corporation’s earnings. This makes the ‘S’ type more suitable for start-up business expecting losses in their starting years.
Income splitting – families who want to start a corporation will find that the ‘S’ type makes splitting income among themselves much easier by giving or selling stock to each other.
Exclusions and benefits – ‘C’ corporations have more tax-free fringe benefits than ‘S’ corporations, they also have exclusions of up to 50% on the gain of sale for ‘qualified small business stock’.
Shareholders – an ‘S’ corporation cannot have more than 100 shareholders and transferring their stocks have limitations such as being restricted to individuals, estates, and charitable organizations. Those conditions limit the amount of equity capital and sources the corporation can have, ‘C’ corporations have more freedom in this aspect.
Estate planning – when an ‘S’ corporation is involved, extra requirements are required from the corporation, it is generally more complicated.
Tax rates – for ‘S’ corporations the tax rate may possibly be higher than the rates applied for a ‘C’ corporation at an equal income level.
Employee stock ownership plans – are only possible with ‘C’ corporations. ‘S’ corporations cannot avail of the tax advantages that these plans have.
The option of electing an ‘S’ status is not available in all states and is reserved for “small business corporations” that have certain qualifications. The taxable income of an ‘S’ corporation is computed in a way that determines what income or losses is passed on to the shareholders and is passed separately to each of them. Once a corporation changes into an ‘S’ corporation it stays that way unless the corporation applies to switch back or it no longer qualifies to be an ‘S’ corporation.
There are many complicated intricacies in the tax code and navigating through all of them can be a tremendous headache. To help you make sense of all of this, it is highly advisable to hire a business lawyer to explain these things to you and help you choose the right type for your company. It may even help save you thousands in taxes!
What’s The Deal With NYC Real Estate Law?
Real estate laws cover a wide range of topics including the possession and ownership of immovable properties such as land and fixtures which are permanently attached to it such as houses, apartments, buildings, and the improvements done upon them. Resources found on or under the land such as trees, agriculture, minerals, and oil are also part of this. Properties which can be moved to or from the land like tools sheds or mobile homes are not considered real real property and therefore are covered by different laws.Real estate is associated with real property and is different from personal property which covers all other types of property, also known as realty. Real estate laws make some of the oldest laws existing and contain many old terms which many people may be unfamiliar with. Through the times, the responsibilities and rights that come with real estate have evolved with the changes in society and it subject to the different laws depending on the state you live in, keeping up may be quite a difficult task.
When you own some real property such as a house and lot, you have rights to do what you wish within your own property asides from what is prohibited by real estate laws in your area. In general, you have rights to make use of your land, sell it, lease it, use it as collateral for loans, or even give it away to a beneficiary as a gift.
There are restrictions on what you can do on your property which are dictated by real estate laws and these restrictions are placed on federal, state, and local levels. Infringing on these laws may result in heavy fines, injunctions, penalties, and sometimes criminal prosecution. Within real estate the most general restrictions fall under:
Zoning: These laws cover restrictions on how a particular property within its area can be used, such as being residential, agricultural, commercial, or industrial. Included in these laws are also the height and size of improvements which can be made to the property.
Environmental Hazards: These limitations dictate what type of materials can be stored on the property as well as stating who is responsible for removing and handling such hazards on the property. These laws talk about the regulation of of the use of lead paint, asbestos, garden chemicals, and toxic waste. It would also cover things such as trimming overgrown tree branches for public safety.
Right of Way and Public Easement: There is a portion of the real property which is open for other people to use, including access to the property such as sidewalks and roads, and areas in which public utilities can be installed such as gas, electricity, water, and telephone lines. Asides from the restrictions above, there are also restrictions which are non-government based, like those imposed by private parties for their respective purposes. In properties which are managed by a developer, they establish rules on architectural design, lot size, garage spaces, and parking areas. There are laws which may vary depending on local government codes when it comes to mortgages, lien for debt payment, and lawsuits emerging from people who are injured on property under your name. Real Estate Law is a complicated topic and is best handled by a real estate legal adviser. If you have any questions or inquiries about a piece of real property you own or would like to purchase some property, it may be best to consult a lawyer first to avoid any unnecessary legal hurdles or penalties that you may incur out of ignorance of the law.