It’s common to hear attorneys and others refer to trusts, but you may not know exactly what they are or why they are needed. A trust is similar to an entity, such as a corporation or an LLC, in that a trust has a separate identity from either the person that formed it or the people it is intended to benefit. The trust may own property in its own name and may even have a separate tax ID for its dealings with the IRS.
Continue reading “What is a Trust? The Basics of Forming a Maryland Trust”
Depending upon your business and your company’s marketing strategies, you may at some time consider operating under a new or second name. In such cases, you should consider using a registered trade name for your business. Since businesses evolve and sometimes move into multiple, distinct lines of business, a trade name can sometimes allow you to market a new line of business without changing the name of the entity or forming a second entity.
Continue reading “Registering a Trade Name in Maryland”
Probate is the process by which a deceased person’s financial affairs are concluded and their assets are transferred to their legatees (if through a will) or heirs (if without a will). Because many people pass away with minimal probate assets, the State of Maryland provides a less burdensome process by which assets can be transferred for such estates.
When the value of a decedent’s property subject to Maryland probate is less than $50,000 (or less than $100,000 when a surviving spouse will be the sole legatee or heir), the estate under is allowed to be considered a “small estate” and use a simplified set of probate rules.
Continue reading “Probate in Maryland – Small Estates Versus Regular Estates”
A popular client question has always been, “How long should I keep my tax returns?” My answer is something many neither expect nor want to hear. Many tax professionals, and even the IRS, suggest discarding tax documents after a certain period of time: 3 years, 6 years, etc. after filed. My answer is usually, “Never.”
Those saying a certain number of years usually base it upon a particular IRS statute of limitations deadline. IRS can audit a return after it’s been filed for 3 years under normal circumstances, for 6 years if there is a “substantial understatement”, and forever if there’s fraud. Therefore, since you’re confident you’re not committing fraud, you should be safe at least after six (6) years, right? No.
The owner of an s-corporation is quickly introduced to some very complicated tax issues. The s-corporation has “flow-through taxation”. This means the s-corporation itself generally pays no income taxes. The s-corporation files its own tax return, but its shareholder owners report and pay the taxes on the owners’ personal tax returns. But these shareholders may also be required to pay themselves a salary if they are also employees or otherwise perform services for the corporation. Continue reading “Income and Salary to an S-Corp Owner”
An Irrevocable Life Insurance Trust, or ILIT, should be of interest to any person buying life insurance. The ILIT is not just for people with estate tax issues. The ILIT can allow you to control how and when insurance proceeds are distributed to beneficiaries. Rather than going straight to the beneficiary, the insurance company pays the proceeds into a trust that then pays the amounts to the beneficiary as quickly or as slowly as you decide. Such a trust can be particularly beneficial when the potential beneficiary is younger, may have potential marital issues, or has difficultly managing money. Continue reading “Forming An Irrevocable Life Insurance Trust (ILIT)”
Locating a property or a tenant for leasing can be a very time-consuming process, so it’s understandable that parties often rush to get the lease signed; however, having a good lease agreement that’s been drafted and reviewed by an attorney can be essential. If issues or disputes arise between the landlord and tenant, it will be too late to address problems with the lease agreement.
Almost everyone has had the opportunity to review a lease during their life, but commercial leases are far more complex. Further, consumer protection laws that save renters from bad landlords often only apply to residential leases, not commercial. With commercial leases, the laws generally assume you are a sophisticated business person and were not “taken advantage of” if your landlord or tenant gives you an unfair lease agreement. Continue reading “Commercial Leases – Drafting and Review”
Many wonder what happens if you die without a Will. Each state, including Maryland, has its own laws that determine what happens to the person’s estate. The differences between each state’s laws do cause confusion, and your assumptions about Maryland’s laws may be incorrect and can cause incredibly negative problems.
When someone dies without a Will, the rules governing the estate are called “intestate laws”. When intestate laws apply, the deceased person may be referred to as having “died intestate” and having left an “intestate estate”. Your state’s intestate laws serve essentially as your Will if your family cannot provide an actual Will. Maryland’s intestate laws are often not what most people expect. Continue reading “Not Having a Will in Maryland”
Whether on purpose or by mistake, taxpayers sometimes find themselves years behind on filing their tax returns. Sometimes people are lucky and decide on their own to file past due tax returns and move on with their life. Others have the decision made for them when an IRS agent knocks on their door. Regardless, when you are significantly behind on your tax return filings, you should seek professional help to ensure you can minimize penalties and, hopefully, reduce the taxes you need to pay. Continue reading “Didn’t File Tax Returns? The IRS Offers Solutions for Nonfilers”
Small businesses comprise a significant portion of our economy. Unfortunately, most small businesses do not survive into the next generation of owners. The hard work and legacy of the current and prior generations can be wasted without proper planning.
Small business owners often feel they have sufficient time to begin making the transition and will delay the necessary steps until some fateful event forces them into acting. This leaves little or no time to prepare the business and the family for the burdens, both financial and managerial, that can be caused by a sudden and unplanned transfer. Continue reading “Family Business Succession Planning”