Writing Examples

Using An Intermediary Trust to Defer Capital Gains Tax

Overview

A taxpayer owns a business or has an individual asset that has increased in value since they purchased it. When they are ready to sell the item, the taxpayer discovers that they will be paying approximately 28% of the increase in value as federal and state capital gains tax.

Selling the asset into an Intermediary Trust and having the trust facilitate the asset’s sale will protect the taxpayer from paying the capital gains tax all at once.

The sale of the taxpayer’s asset to the Intermediary Trust is classified as an “installment sale.” An “installment sale” is defined under Section 453 of the Internal Revenue Code. IRC 453 has been around for over ninety years and is considered well-settled law.

The sales contact is a legal contract between the seller and the Intermediary Trust. The taxpayer enters into an installment sale contact with the Intermediary Trust. The trust acts as a third party to help facilitate the sale of your business or property. The taxpayer sells their asset to the Intermediary Trust. The trust then sells the asset to the ultimate buyer. The trust gives the taxpayer a promissory note, which promises to pay them the sale proceeds in structured installments. The taxpayer, as the seller, can decide how they want their money paid out. For example, the taxpayer can defer paying capital gains tax by investing their entire profit and receiving the interest of your investment.

Once the taxpayer sells their asset to the trust, they have a choice: if they don’t need the income right away, they can invest the entire sum of their profits and collect the interest without paying capital gains tax. If the taxpayer need a portion of the money, they can pay some of the capital gains tax upfront on that portion and then invest the rest, deferring the taxes on the rest.

At any time, the taxpayer can choose to alter their payment structure. they have the freedom to defer their capital gains tax indefinitely. Or they can even withdraw the entire amount and pay the capital gains tax upfront if needed. Our specialists will work with the taxpayer to determine their financial goals.

Process

The taxpayer sells an asset to an Intermediary Trust. After the sale, the trust gives the taxpayer a promissory note, which promises to pay them the sale proceeds in structured installments. The trust in turn sells the asset to the ultimate buyer.

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Deduction Layout

By using a capital gain deferral method of selling an asset to the Intermediary Trust, a taxpayer can reduce or defer state and federal capital gains tax. After the taxpayer sells an asset to the trust a promissory note is issued to the taxpayer that outlines the structured installments. By not distributing the full amount of the sale from the trust the taxpayer only has to pay capital gains tax on the amount that is distributed from the trust. The trust will then sell the asset to the ultimate buyer.

Legal Summary

The installment sale is a legal and proven way to defer capital gains taxes. The Intermediary Trust is governed by Section 453 of the Internal Revenue Code. The Intermediary Trust has a track record of over twenty years of success. There have been thousands of closures and no legal issues regarding the IRS. There have only been a handful of IRS audits, which have all been released without any change.

Tax Opinion

IRC 453

The sale of your asset to the Intermediary Trust is classified as an “installment sale.” An installment sale is found under Section 453 of the Internal Revenue Code. IRC 453 is considered well-settled law.

Assets

Below are just some of the assets that are eligible to be sold to the Intermediary Trust:

Small Businesses
Medical Practices
Dental Practices Optometry Practices Ophthalmology Practices Veterinary Practices Estates Commercial Properties Land
Real Estate
Art Collection Antiques

Jewelry

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The Seller’s Motives

The Intermediary Trust converts your business or property asset into a steady income stream. Once the taxpayer sells their asset to the trust, they can invest the profits and let thier money make interest for them. The taxpayer can then receive the dividends in monthly installments, creating a steady income.

Steps

1. Wilson Hand sets up a 3rd party Intermediary Trust.
2. The taxpayer sells an asset to an Intermediary Trust utilizing an installment sale.
3. The Intermediary Trust issues a promissory note to the seller.
4. The Intermediary Trust pays the agreed installment payments to the seller, including any distributions.
5. The Intermediary Trust sells the asset to a buyer.

The Parties

The following parties are involved in the capital gain strategy:

1. Client: The client is a person or business with an asset to sell.
2. Strategic Partner: The strategic partner is the agent who connects a client with Wilson Hand.
3. Wilson Hand: Wilson Hand is the law firm that assists in putting the transaction together and drafts the necessary legal documents, and provides legal answers to you.
4. Buyer: The buyer is the person or business that purchases the asset from the trust.

Conclusion

Selling an asset to an Intermediary Trust can effectively reduce a taxpayers capital gains tax obligation through a straight-forward and time-tested approach. We look forward to working with you.

 

Avoiding Probate

The word probate might be familiar to you, and you may know that you want to avoid it, but you don’t know how or why. You might be wondering if there is a minimum amount of assets that necessitate probate, will having a will help you avoid probate?

Probate is a legal process that occurs after someone dies. This process is court overseen. It could include multiple steps, court appearances, and attorneys.

The Steps to Probate:
Providing in court that the decedent’s will is valid Identifying and inventorying the decedent’s property The property includes real estate and personal items like jewelry Property appraised to determine estate value
Outstanding taxes and debts will be paid
The remaining property will be distributed according to the will or state law.

The basic requirements of a will are essential to keep in mind when going through probate. Your will must be in writing, signed and dated by the person who made it and signed by witnesses. You have no responsibility to investigate the circumstances of the will’s signing unless someone suggests that there is a problem.

These steps will involve substantial paperwork, four appearances, and lawyers. Probate is to ensure the debts are paid and assets go to the correct beneficiaries. Probate also allows for the transfer of the estate to beneficiaries. It serves as a receipt for the property’s new owner to show that they are the legal owner and can sell, loan, or rent the property.

The size of your estate will not determine if probate will happen. No matter the total value, an estate must go through probate unless planning techniques are utilized. However, some states have different types of probate based on the full value of the estate.

A will alone will not help avoid probate. The will tells the probate judge the wishes of the deceased and to who the estate should go too. A probate judge must determine that the will is valid. A will must also be in probate in the county where the decedent was living at the time of their death. Sometimes the named executor does not live in the same county as the decedent. In cases like this, most probate courts have measures in place to help with this circumstance.

There are two options for avoiding probate. One is creating a revocable living trust. The other is having a will but utilizing beneficiary designations on all the assets in a person’s estate. Both of these options can help you avoid probate.

A revocable living trust allows a person to transfer assets into a trust. The transfer of assets is done through a process called funding the trust. Once assets have been placed in a trust, they will be outside the probate process. The reason is that they are now governed by the guidelines in the thrust and not a will. Now your assets that have been funded to the trust pass through the trust to your beneficiaries without any court interference or probate. A revocable living trust is often considered a more straightforward and faster process.

Utilizing beneficiary designations on assets. Many of your assets, such as bank accounts, retirement accounts, and some personal property, can have a beneficiary designation. Often these beneficiary designations are described as payable-on-death or transfer-on-death. Both of these things have the same end result. With this method, the only thing needed to access funds is a death certificate. Depending on the type of asset, some follow-up information and

then the title are passed to the beneficiary. Beneficiary designations can be used to avoid probate.

Estate Planning with Mental Decline

 

Alzheimer’s and similar diseases can have a significant impact on a family. At the time of a diagnosis, you may not be thinking about the future. However, if you do not plan for your estate now, you could risk your assets and family’s future.

When these diseases reach the stage where a person can no longer remember family members or understand their assets and important documents, they can no longer create or modify an estate plan. The best option that the family has at this point is to file guardianship. If there is not already a power of attorney for financial or health care, you must petition the court for a guardian. A guardian is a person appointed by the court to make healthcare and other decisions for someone who cannot make these types of decisions because of an injury, illness, or disability.

When a person passes away with creating an estate plan, their estate will be divided according to their state’s Intestacy Rules rather than individual wishes. During this process, family dynamics are not taken into consideration. To protect your assets and those you love, having an estate plan is an essential part of ensuring your family is protected after your death.

It is essential to be proactive in creating and updating estate plans when dealing with Alzheimer’s or another degenerative brain disease. When someone is diagnosed with a degenerative brain disease, it is vital that you make these steps for health care, advanced directives, and estate planning as soon as possible.

Health Care Directives

A health care power of attorney designates an individual, ofter called an “agent,” who makes health care decisions on behalf of someone else if the individual becomes incapacitated. This is often referred to as a “health care proxy”. This document allows the agent to make decisions and communicate with doctors and health care providers on behalf of the grantor of the power.

A DNR (do not resuscitate order) lets health care professionals forego performing CPR if an individual’s heart stops or if they stop breathing. A DNR is signed by a doctor and placed in a person’s medical cart.

A living will spell out end-of-life wishes for medical treatments and can make decisions even with a person is incapacitated. A living will can be an essential part of your will to ensure that your family and health care providers know what your wishes are even when you cannot communicate your wishes to them.

Advance Directives

A durable power of attorney gives an individual the ability to act financially on another behalf. Both the scope and the duration of this authority are outlined in the document. The scope of a durable power of attorney includes paying bills, managing your investments, or directing your medical care once you cannot do so yourself.

The last will and testament dictate how assets and estate will be divided upon death. It is vital to have this created or updated as soon as possible after a loved one is diagnosed with Alzheimer’s.

A revocable trust addresses the management of finances and assets while an individual is still living. This document gives instructions about an estate and appoints a trustee to hold titles to property and money on their behalf.

Special Needs Estate Plan

Suppose a loved one has been diagnosed with a debilitating disease such as Alzheimer’s. In that case, a special needs estate plan could be the best option to allocate assets as well as preserve government disability benefits.

Exports and Foreign Investments

Export Controls

There are various regulations given the U.S. -origin product, software, and technology. The U.S. has federal agencies responsible for creating rules applicable to direct items. The vast majority are subject to the Export Administration Regulations (EAR). If an export is a commercial commodity, software or technology, or deal-use items are subject to the EAR, which has both a potential military and commercial or civilian application.

A U.S. company’s product, software, and technology are subject to the EAR. The EAR applies to items made in the U.S., items exported from the U.S. parts, technology, software, or know- how, and deemed exports, which are transfers or releases of controlled source code and technology to foreign nationals inside the U.S.

Depending on whether your items are categorized under the EAR, you might need a license if you plan to release or transfer technology or source code to non-U>S> citizens within the United States or when you are ready to start selling to foreign customers. Export is not only the physical shipment of a commodity. Still, it can also include the release of software as a service application or the transmission of an email containing product design specifications.

One of our knowledgeable lawyers can determine the appropriate export control classification numbers (ECCNs) for your products, software, and technology. Knowing ECCN can help determine where to open offices, hire staff, and target consumers.

Classifying technologies ahead of financing is essential because an investor will often ask for this information. Particularly regarding foreign investments, it is crucial to know whether your company is involved in any way with export-controlled items. As the product classification process can take time, getting this information can facilitate a more streamlined financing front and provide access to much-needed capital if knowing the EVVN is a financing requirement.

The Bureau of Industry and Security (BIS) focuses enforcement efforts on individuals and companies without prior engagement with BSI. The BIS conducted more than 658 enforcement outreach visits to individual and comp aides with no proper history of submitting applications for export licenses and initiated. The government can also impose a range of consequences for noncompliance with export control laws, including criminal and civil penalties, debarment from doing business with the government, and loss of export privileges.

Committee on Foreign Investment in the United States (CFIUS)

The CFIUS is a federal government interagency committee with broad authority to review, approve and block foreign investments in U.S. businesses, including startups and early-stage companies if the investment poses risks to national security.

The CFIUS activities and operations have grown in recent years. CFIUS reviewed 436 transactions in 2021. CFIUS is a group with the potential to influence where you can raise capital, who can sit on a board, and even who can acquire your company. With the proper preparation, CFIUS risk can be demystified, evaluated, and addressed. The CFIUS exercises heightened scrutiny over forging investors from high-risk countries. The key is to perform due diligence on the nationality of your investors and discuss with a lawyer the issues that could arise with CFIUS.

The CFIUS has jurisdiction over many foreign acquisitions and investments in U.S. businesses. CFIUS reviews transactions in each category depending on the specific right acquired. The CFIUS can also review any transactions that it deems are intended to evade its jurisdiction. The CFIUS will not review all foreign investments. A risk assessment during your financing can help to determine whether a CFIUS filing is mandatory or voluntary.

There are cases where the CRIUS has forced a company to divest from closed transactions even when it is years later. The best way to avoid this happening is to the voluntary filing. CFIUS has many investigators who use various tools, including proprietary and intelligence- based, to monitor and uncover non-notified transactions. Suppose you do not make a filing subject to CFIUS jurisdiction. In that case, no safe harbor is available, and the monitoring staff could compel a filing and impose various mitigation measures. Since there is no statute of limitation, you can be affected by transactions that closed months or even years ago. The CFIUS is actively reviewing transactions to identify issues.

The CFIUS recently expanded its jurisdiction to include certain non-controlling investments in companies that work with sensitive technologies or own, operate or support U.S. critical infrastructures such as financial services or telecommunication providers. They also watch companies that have sensitive personal data. U.S. businesses and foreign investors must revive certain non-passive rights.

The CFUIS will continue to focus on businesses with government contacts, those that operate in the infrastructure sector, or those with export-controlled technology. The CFIUS now has expanded focus to foreign invents in the TID U.S. business. These businesses include many early-stage technology companies working with data analytics, AI and machine learning, additive manufacturing, robotics, quantum computing, cyber security, financial technology, and biotechnology.

If your company is considering exporting to foreign countries or getting financing from foreign individuals talking with one of our lawyers will help you understand the possible consequences and how to reduce your risk of issues with the CFUIS.

IRS Processing Backlog

With the end of tax season, taxpayers remain frustrated with the extreme slowdown at the Internal Revenue Service. At the beginning of the 2022 tax season, the Internal Revenue Services had not processed 24 million returns for the 2021 tax season. The backlog included some with owed refunds. Due to overwhelming call volume, most taxpayers could not reach a representative. Currently, the Internal Revenue Service only answers 10% of calls with a 30-minute hold time. Most people never get to an agent or cannot wait on the 30-minute hold time.

Through 2022 the Internal Revenue Service was unable to manage the backlog. Many taxpayers have received automated penalty notices for unpaid taxes leading to the agency stopping the sending out of automatic notices to taxpayers since many returns are stuck in the backlog.

The backlog is affecting taxpayers that have filled paper returns. The Internal revenue service cannot process the current year’s paper returns until the backlog from 2021 paper returns has been completed. This delay can be frustrating for those expecting returns from their taxes. With this backlog, many taxpayers still have not been paid their returns for the 2021 tax season.

The budget is impacting the ability of the Internal Revenue Service to pursue tax crime, conduct criminal tax investigations, and criminal tax audits, among other activities.

In March of 2022, the Commissioner testified in front of the House Ways and Means Committee to discuss the backlog issue. The Commissioner discussed the current tax season, ongoing resource challenges, and the inadequate budget. The problem of the 2.4 million cyberattacks per day has dramatically increased over the last five years.

In June, the National Taxpayer Advocate, an independent organization within the IRS, reported that 21.3 million tax returns remain unprocessed. That is 7 percent more than at the same time last year. Budgetary cuts and staff shortages led to agency-wide delays that have affected millions of Americans and small businesses. Since 2010, GOP-led budget cuts shrunk the agency’s funding by 20 percent even as the number of individual tax filers grew by 19 percent.

In 2023 the Internal Revenue Service has objectives that they will be implementing to try and alleviate this issue that they have been having over the last two years. These new measures include automating the processing of paper tax returns, reducing barriers to e-filing tax returns, Improving the IRS’s hiring and training processes, and improving telephone service. These objectives should improve the processing of tax returns and taxpayer service generally.

The Commissioner expects the backlog will be resolved by the end of 2022. The Internal Revenue Service remains challenged, along with the taxpayers relying on the agency to maintain compliance and promptly obtain refunds. Although the Internal

Revenue Service has an action plan, it is ultimately up to the taxpayer to accept the limited services that can be provided for the current budget.

The Good and Bad of Offshore Tax Havens

Offshore financial centers have options for people and governments looking to protect and grow wealth. Some Offshore financial centers promote tax fraud while others do not. Tax havens are located across the globe. Some are offshore, like the British Virgin Islands, the Cayman Islands, and Hong Kong. Some countries are also tax havens, like Luxembourg, Netherlands, and Switzerland. There are even tax havens in the United States in Delaware and Wyoming.

Creating a tax haven can promote foreign and domestic investments, nurturing long-term commercial growth. Tax havens often offer a lower tax rate to local and multinational companies to attract business. The tax rate is often regionally lower but still competitive. The goal is to improve economic security and boost financial stability in the long term. This kind of tax haven attracts and then generates economic activity.

Tax havens can also be called secrecy jurisdictions. These tax havens can offer very low tax rates or dispense tax altogether. These tax havens are considered non-competitive. A non- competitive tax haven will pull clients and businesses from the surrounding countries with higher tax rates and strict compliance requirements.

Many people are interested in secrecy jurisdictions, including the wealthy, large companies, and celebrities. In most cases, a financier sets up a shell company. The role of this shell company is not to do any actual business but to hold the assets and wealth of those who want to hide their wealth. Most investors pay little to no taxes. While money is moved from one shell company to another, it washes around the globe so that it loses any association with the original source. The original source could be criminal enterprises, money stolen from governmental coffers, or drug trafficking.

The creation and ownership of a shell company are not illegal unless the assets that it holds are. Frequently shell companies are named owners of expensive real estate, airplanes, homes, or yachts. A shell company can become illegal when it is used to launder money or avoid taxes otherwise due in other countries. Big companies in America are often incorporated into low- cost European tax havens. These tax havens include Ireland and Luxembourg. These companies can claim that they are paying taxes but are not paying taxes where they are legitimately owned.

Switzerland is well known for its secret foreign bank accounts. Wealthy Americans avoided paying taxes on their wealth through numbered Swiss accounts. The U.S. Treasury partly changes this practice by requiring foreign banking institutions to annually file a Foreign Account Tax Compliance Act (FATCA). The FATCA means that banks have to report on all accounts owned or held by American taxpayers. American taxpayers with qualifying holdings in foreign banks must file a report of a Foreign Bank and Financial Account (FBAR). The Foreign Bank and Financial Account allows the IRS to compare reports and levy significant fines and penalties on foreign institutions and U.S. taxpayers that fail to report their assets.

Through greater compliance, buy-in from global tax agencies, and investigative journalism, the illegal tax havens and their practices have become more well known. Tax haves can help you achieve your goals. To learn more about tax havens and if they are right for you, speak with an our experienced tax attorney today.

The New Age Of Private Equity Firms

Not too long ago, private equity firms had very little power and ability to see substantial growth in a short period of time. Now, these times are changing. Recently high company valuations and other center macroeconomic factors have created a situation where investors need to be highly involved with a company to expect fast growth. It is more complicated than ever before to gain returns from investments. This complication has created an environment where private equity firms need to prove that they have something to offer companies. This is why more private equity firms are creating post-acquisition value for their portfolio. Skills and strategies to grow revenue and cash flow are essential for private equity firms.

With Increasing competition for deals, private equity firms are being outbid as valuations increase to all-time highs. Private equity firms are finding it harder to compete with multiply strategic buyers. Many private equity firms are having difficulty rationalizing the return on their investments.

This competition is causing private equity firms to rethink the way they have been doing business. Private equity firms are now staying more invalid with companies after a takeover. Private equity firms are creating post-management solutions at a much higher rate than in the past.

Private equity firms want to acquire at least 51% of a company. This control over a company creates a situation where they can maintain some control of the business. Private equity firms will stay involved with management and will like to retain some control over board seats.

Although companies might be worried about the level of control that private equity firms are now expecting, they will need to remember that selling to a strategic partner has the chance that the management team will lose control of the business.

When coming into a company with a strong management team, private equity firms will be in a better position to bring that company to the next level. The company will also gain access to additional capital and operational and professional expertise. With a decline in private equity firms, bring in an operation team after an acquisition. This decline creates the situation for the private equity firm increasing role to get more involved post-acquisition. Making sure that a company becomes familiar with the private equity firm’s management team is essential.

A rapport needs to be built so that everyone can work to gather toward common growth goals. Building this rapport will be vital to the company and the private equity firm. Working together toward common growth goals is the only way to succeed in these changing times.

With private equity firms becoming more involved in acquisitions, this new way of working can create great returns in the future. Although companies might not know which way they want to go with an acquisition private equity firms are working to keep up with the changes that are happening in the market and continue helping companies grow to their full potential.

What to do after you receive an audit letter.

What to do after you receive an audit letter

If you have received a letter from the Internal Revenue Service (IRS) about a civil audit, you are not alone. You may be feeling overwhelmed and not sure where to start. Understanding the steps you need to take, and the timeline of an audit can help reduce anxiety and help your audit go more smoothly.

The Internal Revenue Service (IRS), in the fiscal year 2021, closed 738,959 tax return exams. IF you receive an auditing letter this year, your audit will not be concluded in the next two years, depending on the issues that arise.

The Internal Revenue Service (IRS) does not use telephone or email to notify taxpayers of an audit. There has been an increase in spam activity, so you must know how the IRS will contact you about audits. The IRS will only send you alerts through the U.S. Postal Service. Other lines of communication from the “IRS” are scams and should not be taken seriously. You should never give personal information to these scams on the phone or through email.

There is a look-back period for an audit; generally, this is three years but can be six years in some circumstances. Usually, the Internal Revenue Service (IRS) initiates and audits relatively quickly after a text return is filed. The Internal Revenue Services (IRS) typically concludes an audit about 27 months after the tax return is filled with no extenuating events, facts, evidence, or a tax crime. There are highly complex cases that can take years to complete.

There are two types of audits, correspondence audit and field audit. Both of these audits will be initiated by mail. Speaking with an attorney accustomed to working with the Internal Revenue Service (IRS) can help you resolve the audit with less stress and anxiety.

Correspondence audits are completed by mail. A correspondence audit usually takes less time than field audits but can take longer if additional requests and documents go back and forth in the mail. You will receive a letter outlining the additional documents needed during a correspondence audit. You will then send the requested items back in the mail to the Internal Revenue Service. In 2021 the Internal Revenue Service conducted almost 79 percent of its audits by mail.

Field Audits occur in a regional office of the IRS or at the home or business of the taxpayer. Field outs are often more complex and will take longer than correspondence audits. It is not uncommon for a field out to take longer than a year. Examiners conduct field audits with varying levels of training based on the issues and business circumstances.

Responding to any audit should be done with caution and truthfully. You have the right to representation during an in-person Internal Revenue Service interview. When a complex issues or issues that border on tax fraud, you should work with an experienced IRS tax attorney to help you ensure that your response is clear to the examiner.

When you receive an audit letter, speak with a tax attorney familiar with working with the Internal Revenue Service if you have a complicated or question return. Working with an attorney can reduce your tax liability during this audit.

What You Should Know About the Taxpayer Bill of Rights

The Taxpayer Bill of Rights is a document that outlines the rights of U.S. Taxpayers in working with the Internal Revenue Services. In 2015 congress enacted the Taxpayers Bill of Rights. The Taxpayers Bill of Rights codifies specific rights available to individuals and global corporations regarding tax dealings with the IRS.

The basics of the Taxpayer Bill of Rights:

The right to be informed: The IRS must inform in written form to the taxpayer to identify any issues found on their tax return. If the IRS assesses a penalty, you will receive a notice detailing the penalty, its calculation, and its cause. If you are being audited, your rights will be explained during the in-person portion of this process. The IRS has to justify its action and reasoning regarding your tax return documents.

The right to quality service: While working with the IRS, you have the right to prompt and courteous service. You also have the right to when and where the IRS can contact you. Recently the IRS has had trouble maintaining timely processing of tax returns and responding promptly to phone calls. The IRS is currently working to address these issues.

The right to pay no more than the correct amount of tax: Every taxpayer has the right only to pay what they legally owe in tax, understanding that payments will be appropriately applied to the tax liability. Paying no more than the correct amount is an important right to ensure taxes assessed and paid are legitimate and processed correctly.

The right to challenge the position of the IRS: Taxpayers have the right to object to a decision by the IRS and receive a timely response. The right to challenge includes objections that arise during an IRS civil or criminal audit. When the IRS files a tax lien, this right will apply.

The right to appeal an IRS decision in an independent forum: This allows taxpayers to appeal the decision made by the IRS to the Office of Appeals, the U.S. Court of Federal Claims, or the U.S. Tax Court.

The right to finality and privacy: Taxpayers are notified of the time they must challenge an IRS decision. Taxpayers also have the right to know when an audit has been completed. All IRS processes and examinations around investigation, search, and seizure are legally compliant.

Identifying and deterring tax fraud and other criminal tax matters are a big part of what the IRS does. The Taxpayer Bill of Rights provides protections against abuse of the IRS processes if you become involved in a tax controversy.

If you are in tax litigation or charged with a tax crime, speak with an experienced tax defense attorney about the rights under the Taxpayer Bill of Rights and your options for challenging decisions made by the IRS.

Why A Young Adult Needs A Power of Attorney

A young adult who has just turned 18 has many things that they are looking forward to and plans that they are making. Many families with young adults don’t think about Powers of Attorney and Health Care Surrogate documents. These items should be in place before young adult heads out into the world.

Health Care Directives and Solutions

Once a person turns 18, their parents or guardians can no longer access medical records. If there is a medical emergency, parents cannot automatically get information or make decisions about their child’s care.

In a less extreme situation, such as if the young adult is ill and seeking treatment from a walk-in clinic, parents would not be able to communicate with the facility to get an update on the condition of their young adult child. However, a Health Care Surrogate designation and HIPPS release will help you overcome these roadblocks.

Many young adults will still look to their parents or trusted adults for advice in many different aspects of their life. Suppose they find themselves sick and in the hospital. In that case, Health Care Directives can give everyone peace of mind and make sharing crucial medical information more accessible for everyone to understand and discuss with doctors.

Power of Attorney

On the 18th birthday, parents can no longer communicate protected information with institutions such as schools, banks, and housing complexes, even if the parent is paying for school and housing.

A Durable Power of Attorney allows another person access to handle property and financial transactions. A Durable Power of Attorney can be helpful for young adults that are traveling out of the country or have an unexpected accident. A Durable Power of Attorney can. Permit someone you trust t handle your money under certain circumstances.

Even though turning 18 makes you legally an adult, you may find that there are still many times that you will ask a parent or trusted adult questions about big and small decisions in your life. Giving them access through a Durable Power of Attorney can make a big difference in the peace of mind of an adult.

Not all young adults have a close relationship with their parents. You do not have to name a parent on your Power of Attorney. Listing a trusted adult as your Power of Attorney can give you peace of mind knowing that if anything happens, your financial needs will be taken care of by someone you trust. Discussing the options with an attorney before making a final decision is essential.

Draft a Will

It will aid your young adult throughout their life if you start showing them the importance of having a will, even at this young age when they may not have any assets. This will should be updated throughout their life and will have many variations of beneficiaries as life-changing events happen. Life-changing events include having children and getting married. A Will also allows the young adult to say who will get the assets they do have.

Before deciding about Wills, Powers of Attorney, or Health Care Directives, you should speak with an attorney. An attorney can help you know all the options, how they work, when they would come into play, and what the best options are based on your circumstances.

Why You Need A Will

Many people think that their life is uncomplicated and believe that they do not need a Will. However, if you do not have a will, the state will decide how your assets will be distributed. Some people believe that their assets will go directly to the state if they do not have a will, which is also not true. Your assets will only go to the state if you do not have blood relatives. The state will attempt to find your blood relatives, but if one cannot be found, your assets will go to the state. A Will allows you to choose how your assets are distributed.

Here are a few reasons why you need a Will. 1. Who Will Inherit your Assets

A Will gives you the ability to choose who is going to receive your belongings after you die. Some people think they do not need a will because they only have one person to whom their assets will go, like a spouse or only child; this is how the state would choose to distribute your assets. However, in situations where your family dynamics are unclear, a will is an essential part of your estate plan. A Will makes your wishes known and allows you to include people who are important to you, even if they are not blood relatives.

2. Unforeseen Circumstances

A well-drafted Will is going to cover whom you would like to receive your assets and what happens to those assets if that person does not survive you. This is also why even if you have a Will, you must ensure that it is updated during life-changing events such as births, deaths, and marriage.

3. Beneficiaries May Receive Different Amounts

Without a Will, your assets will be evenly distributed between blood relatives. If you have a will drafted, you can decide how much an individual gets. You can also leave specific items to an individual. This can be especially important if you have family heirlooms that have been handed down from past generations.

4. Disable Beneficiaries

Making special provisions for a disabled beneficiary can be a vital part of a Will. Trusts can be a part of your Will and allow gifting to a disabled individual without putting their public benefits at risk. The trust can be managed by other family members but not owned by other family members. These provisions will reduce the possibility of funds being diverted from the individual and are often suitable for everyone involved.

5. Minor Children

A Will allows you to choose whom you would like the guardian of your minor children to be. This is the person that they will live with and who will decide how their inheritance should be used if not specified in your Will. Without a Will, your extended family will have to choose for themselves. You may want your children to go to a family member or friend with the same values as you.

Creating a Will that names a guardian informs all involved whom you would like to raise your children. This reduces confusion and clarifies for those left behind what your wishes are. A

court will still make sure that this is the best decision for the children, but the written wishes of the parents takes priority.
6. Testamentary Trust

If you have minor children or grandchildren, you can name them as beneficiaries. With a Will, you can make provisions called a testamentary trust. This is a trust that does not come into play until you die. The child’s funds can be managed by the person you choose until the minor is the age you choose.

7. Executor

Drafting a will allows you to choose who will be the executor to settle your estate and carry out your Will’s directives. A Will allows you to choose whom you trust to carry out your wishes and handle your affairs after death. If you do not choose an executor, the court will determine this person for you. There are circumstances where a court may not allow the person you chose to be your executor, one of which is if the executor lives out of state.

8. Disinherited Beneficiary

A Will allows you to disinherit someone who would otherwise be a beneficiary. Sometimes, a person who would typically be a beneficiary broke ties years ago. This could be someone you do not know how to find, or someone you do not believe should receive anything from your estate. Without a will, the state will assume that you wish to follow your bloodline. It is important to remember that some people, like a spouse or minor child, have special rights and may challenge your Will and possibly receive from the estate regardless.

Having a Will can help things go smoother for the survivors once a person dies. A solid estate plan has both Powers of Attorney and Living Wills. There are many more benefits to a will, and you should contact one of our Estate Planning Lawyers to go over all of the benefits of a Will that will meet your specific needs.

Global Economics

It has been two years since the discovery of COVID-19. The would has dealt with slowdowns and recovery. The circus is a global challenge, as are the complications in global supply chain issues. News headlines would look familiar from anywhere in the world.

Recently the economies worldwide are slowing, but in ways that are not coordinated or comparable. Some nations have learned to live with the virus, and the impacts of the Ukraine war and inflation is more bearable for some economies than other. Most countries are moving forward but at different speeds.

Moderations in growth do not necessarily lead to recessions. The world’s major economies can pull through today’s challenges, but downside risks are growing.

United States

The U.S. economy is performing well despite rising interest rates and inflation. Job creation is helping to keep unemployment rates at 3.6%. While the labor markets are stable, the Federal Government can focus on inflation and growing the economy. These prospects are adding to the dollar’s value, which will also help relieve domestic inflation.

United Kingdom

Conditions in the U.K. are increasing harder with the Harmonized Index of Consumer prices exceeding 9%. The higher cost of living created issues for the GDP growth, which decreased to 3% annually. Ongoing complications with Brexit will keep upward pressure on inflation.

Japan

The inflation in Japan of 1.2% seems minor compared to the rates in other countries. However, with this slow growth, the economy will find it hard to support a 2% inflation rate. With incomes unlikely to rise along with inflation, households will feel the strain, while consumption will be imperative for recovery. Personal consumption and housing have been in decline during the first quarter.

China

Lockdowns in China have been widespread and frequent. Lockdowns are damaging to the economy and global supply chains. With a goal of 5.5% growth China falls further from this goal each month. Even without COVID-19 lockdowns, China faces a challenging year fighting supply-chain complications.

Global Economy: Eurozone

Many items are slowing the global economy. The elevated cost of food and gas, declining incomes, and China’s rolling COVID-19 lockdowns are all taking a toll on the worldwide economy. Markets are struggling with high inflation causes central banks to tighten aggressively, even with signs of slowing growth.

Major economies are showing no signs of a wage-price spiral in major economies. The hope is that inflationary pressures will wane; however, these descents will be gradual, leading to lasting disruptions in the commodity markets.

Although this is a gloomy outlook, it has caused the expectations for western economies to show less growth than initially projected, and the possibility of a recession in major markets is more likely.

The eurozone economy has the highest risk of stagflation. The eurozone has been facing a lot of challenges that are weighing on consumer and business sentiment. ; elevated inflation, the Ukraine war, or falling lockdowns in China. All of these challenges are pointing toward lower growth expectations for the region. In the eurozone, the risk of recession is high. The most salient list is the complete cutoff of Russia’s natural gas supplies.

Inflation has reached a multi-decade high of 8.1% for the last 12 months ending in May. Energy prices remain a constant issue even with the recent government interventions. Food costs are also rising, and companies are passing the higher cost to consumers.

The labor markets in the eurozone remain tight, with the lowest unemployment rate since the bloc’s inception and labor shortages reported in several areas. There is a push for higher wages. It is still well below what happened in the U.S. and U.K. wage settlements. There have been modest increases of 2.5% – 3%. The Ukraine war and the slowdown that is certain to happen have taken the pressure off of wage demands. Workers tend to safeguard jobs over seeking high compensation during times of uncertainty.

Due to China’s rolling lockdown and high costs, European manufacturers have been contending with supply chain issues. The war has complicated shipping from Eastern Europe. Gas prices are on the rise with the possibility of rationing.

Europe’s service economy is also starting the slow. The previously strong show was mainly due to the reopening tailwind, which has now run its course. And traveling has once again wained because of high travel costs.

Rising inflation will only be somewhat helped by the government subsidies for the energy bill. Household savings have been depleted, causing retail sales to slip. Consumer confidence is also at an all-time low.