Four big dangers of having assets in joint accounts

Often, older people will add the name of one or more of their children to their checking accounts or brokerage accounts. They might do this to make it easier for the children to help them with their financial affairs. Or they might think that it’s a clever way to avoid probate.

Joint ownership can be good in some cases, but there are a number of dangers in setting things up this way.

To illustrate, imagine that Anna has three children – Barry, Louise, and Todd – and she adds their names to some of her various accounts so they can help her with her finances. What could go wrong? [Read more…]

Good reasons to update your power of attorney today

If you haven’t updated your power of attorney documents in many years, it might be worth having them reviewed to see if you can take advantage of some recent changes in the tax laws.

If you’re ever near death and unable to manage your affairs, your agent may be able to make some smart financial moves that will dramatically reduce taxes for your heirs. But your agent can do this only if your power of attorney documents allow him or her to – so you might want to consider whether to give your agent this authority. [Read more…]

Prenuptial agreements can be a positive, not a negative

Many people have an instinctively negative reaction when they hear the term “prenuptial agreement.” That’s because, when prenups first became popular, they were often seen as weapons by which rich spouses took advantage of less wealthy, less sophisticated partners. A person who got engaged and said, “I want a prenup” was often seen as unromantic at best and scheming at worst.

But the truth is, prenups often provide important advantages for both partners. They’re not always just about protecting yourself in the event of divorce. They’re often about planning your future affairs so as to arrange things legally and tax-wise in ways that are mutually beneficial. [Read more…]

Even young families need estate planning

Ken and Judy are a couple in their 30s. They recently bought a home, and they have a small child. But apart from some home equity, a retirement account at work and a life insurance policy, they don’t have a lot of assets or investments. Do they really need estate planning? Can’t they get by with a simple will from the Internet?

The truth is, even a couple like Ken and Judy can benefit from a good estate plan, and it doesn’t have to cost them an arm and a leg.

Leaving aside the many serious errors that are commonly found in “form” wills in books and on the Internet, Ken and Judy should consider setting up a living trust. [Read more…]

‘This call may be monitored or recorded for quality assurance…’

We’ve all heard recorded announcements that a phone call to a business may be monitored or recorded. But even if you have such an announcement on your phone system, it’s still a good idea to make sure that your employees don’t make mistakes.

Under federal law, a business phone call can be monitored or recorded if one party to the call agrees to it. The problem is that a number of states go further, and require that a call can’t be monitored or recorded unless all parties agree to it. [Read more…]

Companies wonder how many domain names they should register

Most companies need only a handful of Internet domain names to operate, but a lot of them buy up additional names to “play defense” and prevent competitors or disgruntled customers from hijacking their brand.

It’s common for companies to not only register the standard “.com,” “.net” and “.org” domains, but also:

  • Register the “.biz,” “.info” and “.us” extensions;
  • Add common country-code extensions such as “.uk,” “.ca,” “.co,” etc.;
  • Block their company name with the “.xxx” extension (which can usually be done for a one-time fee); [Read more…]

What happens to a business if its landlord goes bankrupt?

With all the ups and downs in the real estate market in the last few years, it’s worth thinking about what would happen to a commercial tenant if the landlord were to go bankrupt, or be unable to pay its lenders.

In general (and there are always exceptions), lenders have priority over tenants. So if a lender forecloses on a commercial property, the lender can invalidate the lease and evict the tenant – even if the tenant has faithfully paid the rent and done nothing wrong. [Read more…]

How to negotiate a ‘radius restriction’ in a contract

Commercial tenants, managers, licensees and franchise operators are often asked to sign a “radius restriction” as part of a contract. This limits them from operating a similar or competing business within a certain proximity of the current business.

These restrictions are fair – up to a point. But if you’re negotiating one, on either side, it’s important to think carefully about the language in the contract so you don’t create confusion or disputes later. [Read more…]

Background checks on job applicants could violate a federal law

A growing number of companies are conducting background checks to screen job applicants, looking for criminal records, credit problems, and other issues. But many employers are unaware that a federal law strictly limits how these checks can be conducted.

Employers who make a mistake can be sued, and if they conduct such checks routinely, they could be subject to a class action. Recently, Wal-Mart paid $6.8 million to settle a class action under the law, and the company that owns the Greyhound bus service settled a case for $5.9 million. [Read more…]

Strategic Estate Planning Attorney

“David has been a trusted estate planning advisor to our family for years. We appreciate his strategic counsel, attention to detail, responsiveness, and ability to explain complex laws in laymen’s terms so that we can make the best decisions for our family. We highly recommend David and his team, particularly for more complicated estate situations that require strategic planners with an in-depth knowledge of the law, a wealth of past experience, and a strong commitment to client service.”   — Daniel and Christine Antonellis

Business Law & Business Litigation: Choosing a Business Entity: Basics for Business Owners

By David Beliveau

People usually establish business entities to protect their personal assets from the risks of operating a business. There are several types of business entities available, and each has its own set of pros and cons.

The types of business entities include sole proprietorship, partnership, Limited Liability Company (LLC), Limited Liability Partnership (LLP), Internal Revenue Code (IRC) subchapter C corporation, and IRC subchapter S corporation. The choice of business entity has both nontax and tax implications.

If someone hangs a shingle and conducts business in the absence of a formal business entity, he or she is deemed a sole proprietorship. If more than one person does so, they are deemed a partnership. Both sole proprietorships and partnerships do not offer any asset protection, so if the owner or owners get sued, business and personal assets are at risk. Both sole proprietorships and partnerships are conduits, for federal income tax purposes and are not subject to a separate income tax.
[Read more…]

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Warmest wishes for a happy holiday season and a prosperous new year!

Focus on your strengths to improve profits

The conventional response to today’s lackluster economy is to focus on cutting business costs. That’s good advice up to a point, but eventually paring down becomes counter-productive. Once you’re done, you’re still stalled in the same economic doldrums.

Rather than restricting your strategy to cost-cutting, try playing to your strengths. What product, service, or other customer benefit do you offer that goes beyond the norm? Think about ways to build upon and expand that benefit, and then communicate it to current and prospective customers. If nothing you offer is out of the ordinary, improve your services or offer a new service that nobody else provides. [Read more…]

IRS issues consumer fraud alert

The IRS is warning people to be aware of fraud connected with Hurricane Sandy. As is usually the case following a natural disaster, scam artists are impersonating charities to get money or financial information from those wanting to help victims of the storm. The scammers contact people by phone, social media, e-mail, or in person. To avoid falling for a scam, donate only to recognized charities, and avoid those with names that are similar to real charities. Do not give personal information to those seeking contributions, and don’t give cash donations. Contributions by check or credit card provide greater security as well as a record for tax purposes.

Get a head start on your 1099 reporting

January is always a busy month for companies. You’re trying to get business off to a good start in the new year, you’re trying to close the books on last year, and there’s 1099 reporting to complete by month-end.

There are several variations of the information returns known as Form 1099. Most are specific to certain industries. But nearly every company, large or small, has to issue Form 1099-MISC. And you have to send it to recipients by January 31, 2013. [Read more…]

IRS gives tax relief to hurricane victims

Victims of Hurricane Sandy may be entitled to some tax relief, according to an announcement by the IRS. Certain tax filing and payment deadlines from late October on will be extended until February 1, 2013. This includes the final 2012 estimated tax payment normally due January 15, 2013 and payroll and excise taxes normally due October 31, 2012, and January 31, 2013. [Read more…]

Note these December tax deadlines

  • December 17 – Due date for calendar-year corporations to pay the last installment of 2012 estimated income tax.
  • December 31 – Deadline to complete 2012 tax-free gifts of up to $13,000 per recipient.
  • December 31 – Deadline for paying expenses you want to be able to deduct on your 2012 income tax return.
  • December 31 – Deadline for taking 2012 required minimum distributions (RMDs).