Plan for the possibility of Alzheimer’s disease

Did you know that 47% of people over age 85 are affected by Alzheimer’s disease? The numbers are high enough that any older person planning for their estate should consider the possibility that they may become intellectually incapacitated at some point.

Of course, a critical step in planning for incapacity is having a durable power of attorney document in place that allows someone to handle your financial affairs if you’re no longer able to do so.

It’s also critical to have a health care power of attorney or proxy form, so that someone you trust can manage your health care if you’re no longer able to provide informed consent. These two forms are essential components of a good estate plan. [Read more…]

Audrey Hepburn’s sons battle over her memorabilia 22 years later

When actress Audrey Hepburn died in 1993, she owned a storage locker containing memorabilia of her career – costumes, photos, awards, scripts, posters and the like. In her will, she directed that the contents be divided equally between her two sons.

But some 22 years later, the two sons (who had different fathers) still can’t agree on how to divide the goods. The older son, who is now in his mid-fifties, has filed a lawsuit and asked a judge to split the possessions. [Read more…]

IRS tax crackdown might actually end up helping

IRS officials have been indicating for a few months now that they’re about to start cracking down on certain estate planning techniques that have been popular in recent years. But ironically, this might actually help a number of clients to save on their taxes.

The issue involves family limited partnerships and LLCs. A technique that many wealthy people have used in the past is to create a family business structure of this type, and then give away partial interests in the business to family members. The idea is that the value of these partial interests can be significantly reduced for purposes of estate and gift taxes.

Here’s an example: Suppose Anne creates a family limited partnership to hold $2 million in assets. She then gives her son Roger a 10% interest in the partnership. You might think that this would result in a taxable gift of $200,000. [Read more…]

Two trustees may be better than one

A trustee has two important duties – managing the assets in the trust, and distributing them to the beneficiaries according to the donor’s wishes. But it can be hard to find one person who can do both things well. An aunt or uncle might be the perfect person to know how to distribute assets to family members, but might not have a lot of financial acumen. An investment advisor might be very skilled at growing the assets, but not have a deep understanding of the donor’s values and preferences.

So you might want to have two trustees and divide the duties – put one in charge of investments and another in charge of distributions.

Some 35 states now have “directed trust” laws, which have an added benefit. These laws say that if the investment trustee makes a mistake or does something wrong, the distribution trustee can’t be sued by the beneficiaries. [Read more…]

Asset protection is for everyone

When many people hear the words “asset protection,” they think of billionaires with Swiss bank accounts and offshore tax havens. But in reality, asset protection is for everyone. It’s simply a series of basic techniques you can use to help ensure that the wealth you’ve accumulated stays with you and your heirs, and not someone else.

Hard-earned wealth can quickly disappear as a result of a lawsuit, a business going under, or a similar event. Asset protection techniques exist to protect you from these possibilities. You can also use them to help protect your children or other heirs from the consequences of a divorce, lawsuit, business failure, and so on.

It’s actually more important for people of moderate wealth to engage in asset protection than it is for billionaires. After all, billionaires can afford to lose a lot of money, whereas the rest of us cannot. [Read more…]

Buyout provisions can have unexpected consequences

Many businesses have a buyout agreement that says that if one owner retires or resigns, the others can buy out his or her interest at a certain price.

These agreements are a smart idea for retaining control of a company. But you should keep in mind that they can sometimes be used in ways you wouldn’t expect. [Read more…]

Know the tax rules for gifts to employees and customers

If you provide bonuses, awards, gifts or prizes to employees or customers, it’s important to understand the tax consequences. It’s particularly important if the recipient is going to have to pay a tax – you’ll want them to understand this fact from the start, so they don’t get an unpleasant surprise later.

In general, any gifts made by a company to an employee are considered wages. They’re subject to both employment tax and income tax, and must be reported on an employee’s W-2 form. [Read more…]

Company gets sued for mentioning a celebrity in its advertising

The Duluth Trading Company was looking for a way to promote its men’s Henley-style collarless polo shirts. It thought of Don Henley, the lead singer of the Eagles, whose first big hit in 1974 was called “Take It Easy.” So it created an ad that said, “Don a Henley and take it easy.”

Result: The company got sued – by Don Henley. [Read more…]

What businesses need to know about commercial leasing

Companies that are leasing their own space for the first time are often surprised by the terms of a commercial lease – and even companies that have leased space before sometimes overlook important points where they might be able to negotiate matters to their advantage. Here’s a quick guide to what to look for: [Read more…]

New rules make it easier for unions to organize workers

The National Labor Relations Board has adopted new, “streamlined” rules for union elections that create additional requirements for businesses and could dramatically shorten the time between when a union files a notice and when a vote is held.

Union elections could now be held as little as 13 days after a union files a petition. This means companies will have to scramble to meet very short deadlines, and may have little or no time to respond and make their case to their workers about why they don’t need a union. [Read more…]

Give financial gifts this holiday season

When planning gifts for children on your holiday list, you might want to think beyond the traditional retail offerings. Consider financial gifts that can bestow benefits for many years to come.

Some financial gift options you might consider: [Read more…]

Customer service: Do your employees walk the talk?

Good customer service leads to repeat sales and referrals, which lead to higher revenues and profits. The result is a stronger, more secure business.

Your sales staff knows this well. Their results are directly affected by customer perceptions. Other em­ployees, such as those in support and back office functions, may not think of themselves as serving the customer. But every employee has an impact, direct or indirect, on customer experience. An incorrect shipment, a late delivery, or a mistake on an invoice, all result in poor service. Make it a goal of your business to meet, and preferably exceed, customer expectations as often as possible. [Read more…]

Make time for some last-minute tax savers

That ticking you hear is the tax clock winding down – quickly. There is only a very short time left to cut your taxes for 2015. Here are moves you can still make before year-end. [Read more…]