Archive for the ‘Dennis Reinholtsen’ Category

Do you run a small, closely held corporation, partnership, or limited liability company in Humboldt County, Trinity County, Del Norte County or Mendocino County?

If so, do you have a Buy-Sell Agreement that provides for the transfer of your ownership interest if you die, retire, become disabled, or want to sell your interest in the business?

The purpose of a Buy-Sell Agreement is to provide for an orderly transition of ownership interest on the occurrence of any number of events.  In addition to those events mentioned above, a Buy-Sell Agreement can also be important when an owner files for bankruptcy, loses a required license or is voluntarily or involuntarily terminated from his or her employment in the business.

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Humboldt County’s elderly and dependent adults need to be aware of the protections from elder abuse, including financial elder abuse, provided by California Law.   The California Legislature, through the Elder Abuse and Dependent Adult Civil Protection Act (“EADACPA”) has provided the framework for protecting against the financial abuse of an elder or dependent adult.

An elder is defined as any person residing in California who is 65 years of age or older.   A dependent adult is anyone residing in California between the ages of 18 and 64, whose physical or mental limitations restrict his or her ability to carry out normal activities or to protect his or her rights.  This includes, but is not limited to, persons whose physical or developmental disabilities have diminished because of age.

Elderly and dependent adults are vulnerable for many reasons.

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While Humboldt County residents should always periodically review their retirement plans and accounts as a part of their estate planning and business planning, now is a particularly good time to consider whether you should convert your traditional IRA into a Roth IRA.

As of January 1, 2010, a significant change occurred in the conversion rules for Roth Individual Retirement Accounts. The $100,000 adjusted gross income limit that has prevented many individuals from converting a traditional IRA to a Roth IRA has been lifted enabling all individuals to take advantage of conversion without any income or filing status limits.

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If you are an entrepreneur who wishes to start up a business in Humboldt County, one of the first questions you will face is what form of business organization should you choose for your business endeavor:

Traditionally, there have been three major forms used to structure a business enterprise:

1)  the sole proprietorship;

2)  the partnership, including the limited partnership; and

3)  the corporation.

Recently, two other business forms have come into widespread use – the limited liability company and the limited liability partnership.

In choosing among these business forms, there are a number of  factors which the entrepreneur should consider.   Three of the most important factors are:

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It is easy to start a business, but how do you get out?

If you are opening a business in Humboldt County, or are current a Humboldt County business owner, your right or ability to transfer your ownership interest is a matter that you need to carefully consider.

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For years estate planners have been extolling the virtues of a revocable trust primarily to avoid the need for a probate of a decedent’s estate.   Now we have another reason to recommend a revocable trust to our client: the number of probate filing fees have significantly increased.

A provision of 2008’s Filing Fees legislation has significantly increased the number of probate filing fees for many probate proceedings.

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WHAT WILL THE FEDERAL ESTATE TAX EXEMPTION END UP BEING?

Estate planners (and their clients) would like to know what Congress is going to do with the Federal estate tax exemption.   For 2009, the estate tax applicable exclusion is $3.5 million ($7 million per married couple).   The estate tax rate is 45%.

As we near the end of a 10-year piece of legislation, if Congress does not act, there will be no estate tax in 2010 and the Federal estate tax exemption will be $1 million ($2 million per married couple) in 2011.

A recent budget proposal of President Obama and the House of Representatives would extend the current $3.5 million exemption and 45% estate tax rate.   In a narrow vote, the Senate passed an amendment to its version of the budget resolution that would increase the estate tax applicable exclusion amount to $5 million ($10 million per married couple).   It’s believed the Senate version of the budget resolution is not likely to be successful because it is not supported by the Democratic leadership.   Also, it is estimated that it would increase deficits by $91 billion in the first 10 years when compared with the cost of the President’s proposal. Tax Policy Center Table.

If you have questions regarding planning your estate to minimize the effect of estate taxes,  please contact our estate planning department.