Legal Articles

Be sure to protect your privacy in a divorce

If you’re like most people, you’ve probably read stories about celebrity divorces, seen their dirty laundry aired in public and maybe even breathed a sigh of relief that you’re not in that boat. But even if you’re a relative nobody, your privacy can still be compromised during a divorce, causing you both emotional and financial harm.

That’s because a divorce is a legal proceeding, and in most states court documents are a matter of public record.

So how can you protect yourself? First, many states allow you to withhold certain highly confidential pieces of information from publicly searchable court documents. This includes Social Security numbers, driver’s license numbers, your mother’s maiden name and other types of information that can be used for identity theft and fraud purposes — or to gain access to other compromising information about you that you want to keep private. It’s a great idea to talk to a family law attorney where you live to see what kind of identifying information you can protect in court papers and how to do so. [Read more…]

Grandparent rights can be complicated, recent cases show

For grandparents fighting for the right to see their grandkids, a couple of cases out of Virginia suggest that it may be easier to hold onto visitation rights that a court has already granted then to go to court and secure them in the first place.

Take the case of Ohio couple Delmar and Susan Lang. Their son died a year after he and their daughter-in-law Melanie got divorced. The Langs’ relationship with Melanie soon fell apart and she tried to keep them from seeing their four grandchildren.

The Langs went to court and a Ohio judge granted them visitation. But Melanie moved to Virginia, where she registered the Ohio order and asked a Virginia court to modify it and strip the Langs of visitation rights. [Read more…]

Too much Pokemon Go? Parents battle over screen time

Divorced parents can battle over a lot of things, including child support, bedtimes, who gets the kids for Thanksgiving or Christmas, educational philosophy, religious observances and stepparents newly arrived on the scene.

Now there’s the issue of screen time. With the increasing pervasiveness of tablets and smart phones, particularly among the younger set, it’s as common to see kids glued to their iPhones or iPads as it is to see adults. But studies show that too much screen time isn’t great for kids. It impacts their attention span and their cognitive abilities, and they can easily become addicted.

So what happens when you want your kids’ screen time limited and your ex is perfectly happy to have them become technology zombies? [Read more…]

Issues to consider before relocating after a divorce

People move for a lot of reasons. Maybe you have an awesome career opportunity in a distant city or you either want to be closer to a new romantic interest or live in an area where you’ve got better odds of finding one. Perhaps you’re a city girl who’s sick of living in the sticks or a country boy who can’t stand the hassles of urban life. Maybe you want to be near the beach or really good skiing.

But whatever your reason for relocating might be, a big move can be a lot more complicated if you’re divorced with kids. If you’re in that boat, it’s important to be aware of certain issues that can arise and talk to a family law attorney about how best to address them.

The biggest issue to consider before relocating is how the move might affect your parenting plan. If you’re like a lot of divorced couples living in the same area you very likely share parenting time. Perhaps it’s joint custody split right down the middle where the kids spend half the week with you and half the week with your ex-spouse, or maybe your ex has the kids one night a week and every other weekend. If you’re moving, say, 250 miles away, your arrangement will no longer be feasible. In that case, your relocation will require modification of your custody agreement. [Read more…]

Have adult children? Take steps to avoid medical access denial

Imagine your college-aged daughter has an accident while away at school and ends up in the emergency room. When you call the hospital, you are denied information about her care because you do not have the proper forms signed. Under the Health Insurance Portability and Accountability Act (HIPAA), you do not have legal access to your child’s health information after they reach age 18, even if your child is still your dependent and their health insurance coverage is in your name. To avoid this administrative nightmare, take the following steps.

  1. Make sure your health insurance coverage will cover your child at his or her new campus home.
  2. Have your son or daughter sign a HIPAA authorization form allowing you access to their medical information. [Read more…]

Learn from the ‘best places to work’

Google, Facebook, and Southwest Airlines are among the top five companies on job search site Indeed’s “Best Places to Work 2017” list. You may not have the resources of these large companies, but you can incorporate some of their ideas into your company’s culture.

Respect. The best companies cultivate a culture of respect, according to a poll conducted by the Society for Human Resource Management. Employees say they feel valued by their leaders and their coworkers regardless of their background, ethnicity, religion, sexual orientation, or gender.

Opportunities for growth. Leaders at the best companies evaluate staff regularly and look for ways to challenge them in new areas.

[Read more…]

Your HSA as a retirement tool – the facts

Health Savings Accounts (HSAs) are a great way to pay for medical expenses, and since unused funds roll over from year to year, the account can also provide a source of retirement funds in addition to other plans like 401(k)s or IRAs. But be aware of how HSAs compare to other retirement investment tools.

  • HSAs work best when they are used to pay for qualified medical expenses. Neither your original contributions to an HSA nor your investment earnings are taxed when used this way.
  • There is no required minimum distribution after you reach age 70½, like there is with 401(k)s and IRAs. [Read more…]

Review your condo bylaws before renting out your place on Airbnb

Renting out your condo on Airbnb might seem like a great way to make some extra money. But before you jump on the opportunity, it’s wise to check your condo association bylaws.

In most cases, you’ll find that the bylaws include restrictions on “leasing.” For example, the rules might state that no unit can be rented for less than 6 or 12 months at a time, or they might state that a unit can’t be used as a hotel.

These provisions exist because the Federal Housing Administration, which is the biggest mortgage lender nationwide, places restrictions on the number of renters a condo complex can have. Generally, the rule is that no more than 50 percent of tenants in any complex can be renters, except in particular cases where it’s 35 percent. [Read more…]

Check your bank’s real estate notices twice

When a bank goes through a merger or agrees to buy or sell mortgage loans, certain notices must be provided to borrowers before and after the transaction closes. Federal law states clearly what notices are required and how they must be worded, but sometimes the legal rules conflict with each other.

It’s helpful to have an attorney review any notices you receive to ensure that they are in compliance with federal law and evaluate how they impact the terms of your loan.

Under a federal law called the Real Estate Settlement Procedures Act of 1974 (RESPA), when a bank or loan servicer transfers the servicing of a residential mortgage loan, borrowers must be provided with written notice by both the transferor and the transferee, including: 1) the effective date; 2) the date on which the transferor will stop accepting payments and the date on which the transferee will begin to accept payments; 3) the name and address of the transferor and a collect or toll-free telephone number to call with questions about servicing; 4) an explanation of any impact on the terms and availability of related insurance coverage; and 5) a statement indicating that the transfer only affects terms directly related to the servicing of the loan. [Read more…]

Don’t let surprise costs of your home purchase shock you

If you’re buying a house, the total price you’ll end up paying is more than meets the eye.

Usually, a buyer pays between 2 percent and 5 percent of the home purchase price in closing costs. Lenders often disclose these costs, but they aren’t the only hidden fees you need to consider.

Other fees to keep in mind include payments to appraisers, home inspectors and settlement agents, as well as the cost of title insurance, homeowners’ insurance and property taxes. [Read more…]

If your house burns down, do you still have to pay your mortgage?

At the closing for your home purchase or refinancing, you are required to sign a promissory note that says you’ll make the mortgage payments every month. That agreement remains in effect even if your house burns down. You’re also required to report any loss to the lender and your insurance carrier promptly.

But a reprieve is still possible. For example, a lender might allow a borrower to suspend mortgage payments for a defined period of time or might put a hold on foreclosure activity.

Based on the standard Fannie Mae or Freddie Mac mortgage form, a borrower must repair or restore the property as long as that is financially possible, unless there is a different agreement between the parties. As a result, you can’t simply walk away after a fire. If you do, you risk defaulting on your mortgage. [Read more…]

Credit monitoring: Be aware the credit score you get might be different than lenders receive

Subscribing to a credit monitoring service to keep tabs on your credit score can be a helpful way to manage and protect your credit.

But did you know that the score you purchase isn’t always the same as the one the lender obtains from a credit reporting agency?

That comes as a surprise to many borrowers. But the real questions are why is this the case and what can you do about it? [Read more…]

Reverse mortgages increasingly available for high-value homes

Seniors with pricier homes now have an increased ability to get a bigger reverse mortgage in order to raise cash for retirement. As the housing market has improved, so-called jumbo reverse mortgages are becoming more popular even though they carry some risk.

Reverse mortgages allow homeowners who are at least 62 years of age to borrow money on their house. The homeowner receives a sum of money from the lender, based largely on the value of the house, the age of the borrower and current interest rates. The loan does not need to be paid back until the last surviving homeowner dies, sells the house or permanently moves out. Homeowners can use money from a reverse mortgage to pay for improvements to their home, to allow them to delay taking Social Security or to pay for home health care, among other things.

The most widely available reverse mortgage product is the Home Equity Conversion Mortgage (HECM), the only reverse mortgage program insured by the Federal Housing Administration (FHA). However, the FHA sets a ceiling on the amount that can be borrowed against a single-family house, which is determined on a county-by-county basis. The national limit on the amount a homeowner can borrow is $625,000.  [Read more…]

Don’t wait until it’s too late to execute a power of attorney

A durable power of attorney is an extremely important estate planning tool, often more important than a will.  If you become incapacitated due to dementia or some other reason, this crucial document allows a person you appoint (your “attorney-in-fact” or “agent”) to act in place of you (the “principal” ) for financial purposes.  The agent under the power of attorney can quickly step in and take care of your affairs.

But in order to execute a power of attorney and name an agent to stand in your shoes, you need to have capacity.  Regrettably, many people delay completing this vital estate planning step until it’s too late and they no longer are legally capable of doing it.

What happens then? Without a durable power of attorney, no one can represent you unless a court appoints a conservator or guardian. That court process takes time and costs money, and the judge may not choose the person you would prefer. In addition, under a guardianship or conservatorship the representative may have to seek court permission to take planning steps that he or she could have implemented immediately under a simple durable power of attorney. [Read more…]

Life insurance can play role as part of estate plan

For young families, life insurance can be a great help in replacing lost income.  But as people get older it can also serve as part of an estate plan.

Historically, one main reason to buy life insurance as part of an estate plan was to have cash available to pay estate taxes. Now that the estate tax exemption is so big (in 2016, estates could exempt $5.45 million per individual from taxation), most estates don’t pay federal estate taxes, and President Donald Trump and his Republican allies would like to eliminate the estate tax entirely. However, life insurance can still be helpful in a number of other ways:

  • Providing immediate cash. Life insurance provides cash to use for the payment of debt, burial or estate administration fees. In addition, life insurance can be used to pay state estate taxes, if applicable. [Read more…]

The life estate: a useful tool in the right circumstances

The term “life estate” often comes up in discussions of estate and Medicaid planning. Life estates can be used to avoid probate and to give a house to children without relinquishing the ability to live in it.  They also can play an important role in Medicaid planning.  But what, exactly, does the term mean and how are life estates used?

A life estate is a form of joint ownership that allows one person to remain in a house until his or her death, when it passes to the other owner.  Two or more people each have an ownership interest in a property, but for different periods of time. The person holding the life estate — the life tenant — possesses the property during his or her life. The other owner — the “remainderman” — has a current ownership interest but cannot take possession until the death of the life estate holder. The life tenant has full control of the property during his or her lifetime and has the legal responsibility to maintain the property as well as the right to use it, rent it out and make improvements to it.

When the life tenant dies, the house will not go through probate, since at the life tenant’s ownership passes automatically to the holders of the remainder interest. Because the property is not included in the life tenant’s probate estate, it can avoid Medicaid estate recovery in states that have not expanded the definition of estate recovery to include non-probate assets. Even if the state does place a lien on the property to recoup Medicaid costs, the lien will be for the value of the life estate, not the full value of the property. [Read more…]

Are you covered by Medicare while traveling within the U.S.?

Those who have reached age 65, the typical age of Medicare eligibility, often have more time to spend traveling.  Although Medicare coverage is generally not available when beneficiaries are overseas, the news may be better for those exploring destinations closer to home.

If you have the original Medicare, the answer is simple: You can travel anywhere in the U.S. or its territories and receive health services from any doctor or hospital that accepts Medicare.  (“Territories” includes Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa and the Northern Mariana Islands.) The amount you will pay depends on whether the provider “accepts assignment.”  Providers that take assignment agree to accept the approved Medicare amount as payment in full, although in the case of outpatient visits you or your Medigap insurer may be left with a 20 percent coinsurance, as would be the case for care at home.

Providers that don’t accept assignment may charge you up to 15 percent above the Medicare-approved amount, although this percentage may be lower in some states. In the case of providers that don’t accept Medicare at all, you will have to pay the entire cost of care. [Read more…]

Five home office deduction mistakes

Here are five common mistakes of those who deduct home office expenses.

  1. Not taking it. Some believe the home office deduction is too complicated, while others believe taking the deduction increases your chance of being audited.
  2. Not exclusive or regular. The space you use must be used exclusively and regularly for your business.
    • Exclusively: Your home office cannot be used for another purpose.
    • Regularly: It should be the primary place for conducting regular business activities, such as record-keeping and ordering. [Read more…]

Three actions to save for retirement

If you haven’t started saving for retirement or you haven’t saved enough, here are three actions you can take to put you in a better position during your golden years:

  1. Contribute as much as possible every year to a 401(k) pretax retirement plan, up to the $18,000 maximum, or $24,000 if you are age 50 or older.
  2. Contribute as much as possible to a Traditional or Roth IRA every year, up to the $5,500 maximum, or $6,500 if you are age 50 or older. [Read more…]

Reap the benefits of hiring your child for the summer

Hiring your children to work in your business can be a win-win situation for everyone. Your kids will earn money, gain real-life experience in the workplace, and learn what you do every day. And you will reap a few tax benefits in the process. The following guidelines will help you determine if the arrangement will work in your situation.

  • Make sure your child works a real job that he or she can reasonably handle, no matter how basic or simple. Consider tasks like office filing, packing orders, or customer service.
  • Treat your child like any other employee. Expect regular hours and appropriate behavior. If you are lenient with your child, you risk upsetting other employees. [Read more…]

Tax-free income

Yes, that’s correct, there are some forms of income you receive that may be tax-free. Here is a list of eight common sources of tax-free income.

  1. Gifts. Gifts you receive are not taxable income to you. In fact, they are not subject to gift tax to the person giving the gift as long as the gifts received in one year from one person do not exceed $14,000.
  2.  Rental income. If you rent your home or vacation cottage for up to 14 days, that rental income does not need to be reported. Homeowners often can earn some tax-free income by renting out a home while a large sporting event (Superbowl or a golf event) is in town. [Read more…]

Review your estate plan when you move across state lines

When you make a move out of state, be sure to review your estate plan with an estate planning attorney in your new domicile, as trust and estate laws have some differences from state to state.

In most states, the probate court will recognize a will from another state. But in the case of a dispute, you can’t be sure the judge in the new state will understand your will the way that you meant it.

Your new place of residence might place restrictions on executors from out of state. It’s also possible that your new medical provider or bank won’t adhere to powers of attorney drafted under another state’s laws. [Read more…]

Issues to consider before gifting your home to your child

Passing your house on to your children before your death offers some advantages, but there are pitfalls to avoid.

If your children inherit the property through your estate, the cost basis on the property will be the value of the home on the day of your death. But if you gift the children the property while you are still alive, they will inherit your cost basis, including potentially large capital gains if they decide to later sell the home.

You still might want to remove the property from your estate to help you better qualify for assistance with long-term-care costs. But be aware that you are subject to a five-year look-back on assets. That means that when you apply for Medicaid, gifts or transfers of assets you make within five years of the date of the application for assistance may be subject to inclusion in your estate. [Read more…]

How to change an irrevocable trust

When dealing with irrevocable trusts the ability to effect change can be difficult to understand, presenting more questions than answers.

The correct answers often depend on a variety of factors, but a good starting point is state law and the trust document itself.

When modification or termination of an irrevocable trust is sought, a possible mechanism is for the trustee or beneficiary to seek a court order. [Read more…]

Beware the pitfalls of naming a minor as your beneficiary

A minor generally doesn’t have the right to manage his or her assets, including any inheritance.

But sometimes a minor child becomes the beneficiary of a sizable family inheritance. That can occur because a parent dies without a will or trust, leading to an unavoidable direct inheritance by the child.

If a minor is chosen as a beneficiary of a retirement account or life insurance policy, many challenging issues can arise.

First of all, a minor is not legally allowed to take control of inherited assets left directly to him or her. Instead, an adult or financial institution has to be appointed to manage the estate until the minor turns 18.

[Read more…]

Estate planning options for blended families

The dynamics of a blended family, defined as one where at least one spouse has at least one child from a prior marriage or relationship, can complicate financial and estate planning because no off-the-shelf plans apply.

It’s important to contact your estate-planning lawyer to ensure complete review of all personal and economic aspects of your family and a resulting plan that works for everyone involved.

From designating account beneficiaries to updating wills and trusts, it takes attention to detail to ensure specific wishes are carried out properly. Effective, collaborative planning can address the family’s needs and goals while building trust and helping everyone move forward together. [Read more…]

Many requests for businesses to take goods off Amazon or eBay fraudulent

It’s pretty common for businesses of all sizes to sell products on sites like Amazon or eBay.

So imagine one day receiving a “take-down notice” informing you that the site is taking down your listings because another party has demanded it under a federal law called the Digital Millennium Copyright Act (“DMCA”). According to the notice, the other party says your goods infringe its copyrights.

If you ever receive such a notice, be sure to look carefully into the matter. That’s because it’s become more common for these demands to have no valid copyright infringement claim to back them. Or worse yet, sometimes the demander doesn’t own any copyrights at all. [Read more…]

Injury and illness records may become public

Most businesses with 10 or more employees must keep records of serious work-related injuries and illnesses. This OSHA rule is intended to help businesses identify and address occupational hazards.

Under new OSHA rules, however, many businesses will also have to submit their records to OSHA itself, which apparently plans to make them public, at least in some form.

Businesses with 20 or more workers must begin submitting OSHA Form 300A starting July 1, 2017. In addition, businesses with 250 or more workers must begin submitting OSHA Forms 300 and 301 starting July 1, 2018. Starting in 2019, all information must be submitted by March 2. [Read more…]

Can you sue if a customer posts a bad online review?

For a business, a bad online review can help determine whether new clients flock in the door.

But if someone writes such a review on Yelp or any other website, you might be out of luck.

In a recent case in California, a federal appeals court decided that an angry business owner who got a one-star rating from a customer couldn’t sue Yelp. [Read more…]

Review your retaliation policies in light of EEOC guidance

It’s even easier for employees and former employees to sue businesses for retaliation under the Equal Employment Opportunity Commission’s new enforcement guidance.

For the first time since 1998, the agency has updated its guidance on the claim, which is already “asserted in nearly 45 percent of all charges … and is the most frequently alleged basis of discrimination,” it said.

Needless to say, preventing a claim is much better than defending one, and retaliation often occurs even when the underlying discrimination claim doesn’t have merit. So businesses must take action to avoid retaliation in the first place. [Read more…]

Could your business be facing a lawsuit over Internet search results?

Any business would jump at the chance to dictate the order of organic Internet search results that include its name. But that’s not so easy.

Still, a judge in Florida recently told a well-known, international company that it must find a way to do exactly that. And in the vast world of the web, it’s a cautionary tale for businesses of all sizes.

The case involves a Gainesville, Fla., company, Uber Promotions, which has a regional trademark that supersedes the more well-known ride-sharing service’s trademark. [Read more…]

‘Critical’ and ‘hostile’ work environment not the same thing

If you’re subject to pervasive harassment, intimidation and/or abuse and it’s so bad that you can’t work there anymore, you may be able to bring a “hostile environment” claim.

In some cases, these claims have resulted in employers paying significant damages.

However, employees need to clear a pretty high bar to establish a hostile environment. As a recent Pennsylvania case shows, just having a mean boss who maintains an unpleasant working environment isn’t necessarily enough. [Read more…]

Company burned in court for misleading job candidate

Competition is tight for highly skilled workers. And it’s understandable that as an employer, when you need to fill a position quickly you’re going to try and sell the position in the best light possible. But it’s a really bad idea to withhold important information from a job candidate, especially if the opportunity in question is less than secure.

Take for example a recent case out of Massachusetts. The employer, Boston-based Loomis, Sayles & Co., was planning to launch a new hedge fund. To staff the launch, Loomis set its sights on Vishal Bhammer, who was working in finance in Hong Kong. During the recruitment process, Loomis made numerous promises to Bhammer about its commitment to the launch and the resources it planned to dedicate to the fund.

Ultimately Bhammer accepted an offer. And relying on Loomis’s assurances that it was safe to do so, he gave notice to his employer and moved to Singapore as the position required. [Read more…]

RIF of worker on medical leave creates problems

Under the Family and Medical Leave Act, people who work for companies with more than 50 employees are generally entitled to take up to 12 weeks of unpaid leave per year in order to deal with a medical condition, care for a new baby or tend to a sick family member.

But can an employer lay off a worker on FMLA leave for economic reasons, like as part of a companywide “reduction in force” (RIF)?

In most cases, the answer is “Yes.” But employers still need to tread carefully, because if the employee can show evidence that his or her FMLA leave contributed to his or her inclusion in the layoffs, the employer could get hit with an FMLA retaliation claim. [Read more…]

Beware the ‘cat’s paw’ and investigate before you act

The oddly named “cat’s paw” theory (which comes from one of Aesop’s Fables) refers to a scenario where an employer disciplines or fires an employee for what it thinks are legitimate reasons, but does so based on information from a supervisor who had illegal motivations. In most cases, it means the supervisor who reported the worker for discipline was motivated by racial or religious prejudice or a desire to retaliate against the worker for asserting certain rights. In these situations, a court can still hold the employer responsible for unlawful discrimination or retaliation.

A recent decision from a federal appeals court suggests that the cat’s paw theory may be wider-reaching than many of us thought. In that case, a female employee complained to supervisors about an explicit photo sent to her by a co-worker. The co-worker then apparently manipulated text messages on his phone to make it look like the woman had willingly taken part in sexually charged conversations and that he had been a target of sexual harassment. Relying on the co-worker’s so-called evidence, the employer fired her. The employer also apparently conducted no investigation and rebuffed the woman’s offer to display her own phone to rebut the co-worker’s version of events.

She sued the company in federal court claiming she was fired in retaliation for complaining about sexual harassment. [Read more…]

Hot topics in the employment law world

Labor and employment law is a constantly changing area and it can be tough to keep up with the most recent developments that affect employers’ and employees’ rights in the workplace. To help you stay up to date, here are two areas where companies have been getting in trouble recently:

  • Disability, medical leave and privacy issues

Dealing with employee health issues can be a minefield for employers, as home-improvement retailer Lowe’s found out recently when it had to settle a disability discrimination claim brought by the Equal Employment Opportunity Commission for $8.6 million. The EEOC accused Lowe’s of violating the Americans with Disabilities Act (ADA) by firing workers who had been on medical leave longer than the limits the company had set. It seems Lowe’s made two mistakes here: It imposed an arbitrary medical leave limit that may have contradicted what employees were entitled to under the Family and Medical Leave Act (FMLA) and it apparently refused to accommodate workers with disabilities by allowing longer leaves that wouldn’t have imposed an unreasonable hardship on the company.

A case out of Pennsylvania also shows that employers must be careful when dealing with employees who need time off to deal with a medical situation. In that case, a worker took two months off to care for ailing parents. When she called to check in, she was told she would be fired if she didn’t resign on her own. Though it’s disputed as to whether the worker formally requested FMLA leave, a federal judge said it didn’t matter. It was enough that as soon as it was possible to do so she informed the employer of her need to take leave and told them why. [Read more…]

Reasons to incorporate your business

Here are some reasons you may want to consider incorporating your growing business.

Protect your personal assets from creditors. When you operate your business within a corporation, creditors are often limited to corporate assets to satisfy a debt. Your home, savings, and retirement accounts are no longer fair game.

Provide a personal liability firewall. The corporate form can help protect you against claims made by others for injuries or losses arising from actions of your business. [Read more…]

4 tips to landing your dream home in a seller’s market

Here are some suggestions to landing your dream home in our current real estate market.

  1. Be nimble, be flexible. Try to investigate new listings quickly – within hours of their first posting, if possible. If you’re interested in a house but an inspection finds a few flaws, you may have to be flexible about accepting a house with a few quirks or in need of some repairs.
  2. Make a strong offer. A seller’s market isn’t a time to lowball your first offer on a house you want. If you’ve prepared and set your expectations below your minimum price range, you should be able to make a strong offer to ensure you are among the most attractive bidders. You shouldn’t wildly overpay, but making a strategic offer above the listing price may sweeten the deal enough to close quickly. [Read more…]

Keep your audit fears in check

Getting audited by the IRS is no fun. However, your chances of being audited are probably lower than you think. A look at the latest IRS statistics for 2016 reveals some interesting and reassuring facts about the risk of an IRS audit.

Audits are becoming less common. The number of individual tax returns the IRS audited fell to a 12-year low last year, to just above 1 million. Audits have been steeply declining over the last five years, which the IRS commissioner said was due in part to declining budgets and a smaller workforce.

Audits target the rich. It’s a fact: IRS audits target the super-rich. The statistical chance of being audited increases dramatically for people of higher income levels. [Read more…]

Tax deadlines for June

June 15

  • Second quarterly installment 2017 individual estimated tax due
  • Second quarterly installment 2017 estimated tax for calendar-year corporations due
  • Individual tax filing deadline for U.S. citizens living or serving in the military overseas

Do I have to show how I’ve spent my child-support payments?

The popular rap artist T.I. has had his share of run-ins with the law. But he’s also recently gone to court voluntarily to protect his own interests. When his ex-girlfriend, with whom he had two sons, sought to increase his child-support obligations from $2,000 to $3,000 a month, T.I. went to court to challenge this, arguing that she was spending the money on herself rather than on the kids. He demanded an accounting of how she was spending the money.

T.I. isn’t alone. Many non-custodial parents are suspicious about how the other parent is using their child-support payments and would like similar accountings. So are they entitled to it?

In many states, they’re not. But some states do make provisions for such accountings in particular circumstances. [Read more…]

Ex-wife can’t touch husband’s interest in ‘spendthrift trust’

An “irrevocable spendthrift trust” is a popular vehicle for parents to pass along wealth to their kids while protecting the trust’s assets from their kids’ worst instincts.

Here’s how it works. The parent sets up a trust and names the child or children as beneficiaries. The trust document also includes language stating that if one of the beneficiaries owes someone money, that creditor can’t touch the assets in the trust before they’ve been distributed. And the person named as “trustee” is in charge of these distributions.

Once a beneficiary has received a distribution from the trust, creditors can go after that money, but only money in excess of what the beneficiary needs to support him or herself. [Read more…]

Plan ahead for bringing a new spouse home from abroad

Traveling or working abroad can be very exciting. You get to experience new cultures, see new places and meet fascinating new people. In fact, you might just fall in love and decide you want to bring this special someone back to the U.S. and spend the rest of your lives together.

Congratulations and best wishes for a wonderful future! But remember that this could be a recipe for heartache and disappointment if you don’t follow some necessary steps along the way. That’s because returning to the U.S. with a non-citizen spouse isn’t necessarily as simple as you think and takes advance planning. Otherwise you may arrive in America ready to live as a family, only to have immigration officials block your spouse from coming in.

So what do you have to do? [Read more…]

Undoing your divorce: What happens when you have regrets?

A lot of times after a divorce agreement is finalized spouses may have misgivings. Not necessarily about being divorced, but about the divorce agreement itself. Hindsight is 20/20, and they might feel they got a raw deal and could have walked away with a lot more. So if you’re unhappy with your divorce agreement, can you undo it?

Generally the answer is “No.” In most states, courts won’t revisit judgments lightly.

Still, there are a few situations where a court may decide to give a divorce judgment a second look. [Read more…]

Courts expanding definition of ‘parent’ to recognize ‘de facto’ parenthood

Traditionally who was a parent was pretty clear-cut. If a child was yours biologically or if you adopted him or her, you were considered a parent. That would give you the right to seek custody and visitation if you and the other parent were no longer living in the same home.

But just as traditional notions of “family” have evolved in recent years, so have traditional notions of who a parent is. Two recent court decisions make this clear. Both decisions appear to recognize the idea of a “de facto” parent: a non-adoptive, non-biological caretaker who has earned parental status through the bond he or she has developed with a child and who deserves to be viewed on equal legal footing with the biological parent. And while both decisions involve same-sex couples, the reasoning behind them could extend to any non-adoptive, non-biological “parent.”

The first case is from Maryland and involved Michael Conover, a transgender man (a person who was born biologically female but identifies and lives as a male) who married a woman before undergoing gender transition. Before his transition, he and his wife, Brittany Conover, lived as a same-sex couple. [Read more…]

Realtors survey: First-time home-buying is down

In reviewing 35 years of survey data on home buyers and sellers, the National Association of Realtors (NAR) announced five notable real estate trends.

The organization’s survey, called Profile of Home Buyers and Sellers, dates back to 1981 and is the longest-running series of national housing data evaluating the demographics, preferences, motivations, plans and experiences of home buyers and sellers.

Here are the key takeaways over the past 3 ½ decades: [Read more…]

Financing for energy improvement loans now easier to obtain

Residential properties encumbered with a Property Assessed Clean Energy (PACE) obligation are now eligible for FHA-insured mortgage financing.

The change applies both to new purchases and refinancing, under a guidance issued in September by the U.S. Department of Housing and Urban Development (HUD) and the Federal Housing Administration (FHA).

PACE is a popular program that provides an alternative way to finance energy improvements to properties, such as energy efficiency, water conservation and renewable energy upgrades. The financing is provided by private entities in connection with state and local governments. [Read more…]

Clean-up not disclosed; Seller sued for fraud years later

A recent case highlights the importance of disclosing any environmental contamination and clean-up that took place on your property when you sell it, even if you sell it “as is.”

A New Jersey appeals court decided that a seller’s failure to disclose such information could expose him to liability for fraud many years after the sale.

In the case, the seller had owned the property since 1983 and defaulted on the mortgage in 1987. The seller’s mortgage lender took possession of the property and made plans to sell it. The lender had an environmental consultant take soil samples and learned that the property was contaminated with perchloroethylene (“PCE”). [Read more…]

The surprising effect of Airbnb income on mortgage refinancing

Renting out your house when you’re out of town or offering up an extra room while your son or daughter is away at college sounds like a great way to make some extra cash. And services like Airbnb have made the process rather simple.

But it might not be quite so simple when you go to refinance your home. Recently, some big banks are raising an eyebrow because making money off your home can be construed as turning your residence into commercial property.

According to a report in the Wall St. Journal, some banks — including Bank of America Corp. and Wells Fargo & Co. — have been telling borrowers who make income from Airbnb that they’re no longer able to get certain types of loans or that they must pay higher interest rates. [Read more…]

Everyone knows someone who missed the boat

This year’s April 18 tax deadline has come and gone, but not everyone has filed a 2016 tax return. While many have filed an extension and intend on getting their return in order, too many taxpayers who should file, simply do not. Common culprits are older, retired parents and young adults who are new to tax filing requirements.

Here are some of the reasons why it will help them to file a tax return.

Get withholdings. People who work but earn less than the required filing threshold should file a tax return so they can get back any withholdings their employer may have taken out of their paycheck. [Read more…]