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Financial Advisor Stole Nearly $900,000

March 1, 2017

Filed under: Finances — Neel Shah @ 9:15 am

Finding the right people to help you with your estate and your financial affairs is more than just good advice- it can help protect everything you have worked so hard to build. Make sure you investigate the background of any professional you intend to work with so that you have peace of mind about your future.

It is always important to carefully vet and obtain references and testimonials for individuals that you wish to include in any aspect of your future such as your retirement planning, your financial planner, and your estate planning attorney. A new story has emerged indicating that an individual in New Jersey stole approximately $900,000 that a client had given that person to invest in mutual funds.

Money was given to a financial advisor in March 2011 to be invested in mutual funds overseen by an investment firm. Instead the individual spent the money on business and personal expenses including funds spent in a car dealership, a country club, lending institutions and a private school.

The client requested updates and statements on his investments and fictitious financial statements were provided. It is always important to ensure that you are working with someone who is reputable and committed to carrying out your best interests. But when it comes to your finances you will need to do this for both you as well as any aging parents who may have similar concerns.           

Overseas Bank Accounts: What Do Small Business Owners Need To Know About FBAR?

May 26, 2014

In the even that a foreign partnership owns foreign bank accounts with aggregate balances over $10,000 (US) on any particular date, the business owner should be aware of FBAR filing requirements. A financial interest in a mutual fund, trust, brokerage account, or any other foreign financial account may require an annual filing known as the Report of Foreign Bank and Financial Accounts through the Internal Revenue Service.

Overseas Bank Accounts What Do Small Business Owners You Need To Know About FBAR
(Photo Credit: downtowncanandaigua.com)

Some of the stipulations of who meets this requirement include that if the owner of record or the holder of a legal title is a partnership in which a US person owns (either directly or indirectly)

  • An interest in more than 50 percent of the partnership’s profits
  • An interest in more than 50 percent of the partnership capital.

There are a few exceptions as far as the reporting goes. Those who may be able to avoid filing an FBAR include:

  • Correspondent/nostro accounts
  • Some foreign financial accounts jointly owned by a spouse
  • Foreign financial accounts owned by government entities or international financial institutions
  • IRA owners and beneficiaries
  • Certain individuals with signature authority but no financial interest in a foreign financial account
  • Participants in and beneficiaries of tax-qualified retirement plans
  • Trust beneficiaries (so long as a US person reports the account on an FBAR on the trust’s behalf)
  • Foreign financial accounts maintained on a United States military banking facility

As you might expect, IRS rules in this category can be highly complex and subject to specific terms. That’s why it’s helpful to meet with your tax law and accounting professional to determine your filing requirements. To learn more, email us at info@lawesq.net or contact us via phone at 732-521-9455

 

Do you feel lucky? What is a Quick Draw Buy-Sell Agreement?

April 30, 2014

Filed under: Finances,Income Tax Planning,Inheritance Taxes,Insurance,Life Insurance,Small Business Owner,Taxes — Tags: , , , , , , , , — Neel Shah @ 8:52 am

Many business owners have a buy-sell arrangement set up for the future. It’s helpful to draw out these directions in advance, especially when there is the potential that future owners or part-owners might get gridlocked with one another. In these situations, buy-sell directions can help disputing parties move forward.

Do you feel lucky What is a Quick Draw Buy-Sell Agreement

It’s possible that you’ve already heard about a shotgun buy-sell arrangement, but a quick draw agreement is a bit different. Under a shotgun, the offering individual stipulates a price. The offerree then has the option to buy those shares or to sell their own shares to the offeror. The exact timing isn’t a major issue in this situation, since the offeree retains the option to either buy or sell. In some ways, this can even be seen as a disincentive to pull the trigger.

All that changes under a quick draw arrangement. Under a quick draw, either side can provide a notice to purchase the other’s shares at a price that is determined through an appraisal process. This can happen after a contractually defined “trigger event”, but the timing of the trigger pull is essential in quick draw. Simply put, timing is everything.

Under quick draw, buyer and seller designation is determined simply by who submits their notice to purchase the other’s shares first. A difference of even just minutes can determine who gets to buy and who gets to sell. This complex process was recently held up in Mintz v Pazer, in which the judge supported this out of the box buy-sell arrangement.

If you’d like to learn more about your buy-sell options and put a plan for the future in motion today, reach out to us at 732-521-9455 or email us at info@lawesq.net

Discuss Finances Before Saying ‘I Do’

April 2, 2014

Filed under: Beneficiaries,Estate Planning,Finances,Life Insurance — Neel Shah @ 10:00 am

If you or someone you know is planning a wedding anytime soon, there are many things to consider. One of the most important of which is finances. You must discuss money with your future spouse, even if doesn’t sound romantic.

English: A Catholic wedding ceremony in Milwau...

(Photo credit: Wikipedia)

Talking about finances is at least as important as discussing the reception or honeymoon. Maybe more important.

Talking about finances — budgets, insurance, savings and so forth — could be critical to ensuring a happy marriage, says a story on cnbc.com.

Setting a specific time to sit down and talk about how you want to organize your finances after marriage is key. Will you have joint checking accounts or separate ones? Who is going to manage the money and pay the bills? These are just some of the questions that must be asked.

It is also critical to set a budget and put your expenses and financial goals down on paper. It is important that each partner be okay with the other’s spending habits.

If there are disagreements, the couple may want to obtain the advice of a marriage counselor or financial advisor.

Other areas to discuss are life insurance ( a “must” for most couples, according to the article); debt, if there is any;  disability insurance; homeowners insurance; health insurance; and an estate plan, or at least a plan to designate beneficiaries in case of one’s death.

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What To Do When Your Elderly Parents Move In With You

March 4, 2014

Filed under: Caregivers,Elder Law,Finances — Neel Shah @ 5:36 pm

More and more, elderly parents are moving in with their grown children. With the increasing costs of nursing homes, this makes financial sense for many people. But what should you and your parents do to prepare for such a dramatic move?

English: My parents.

English: My parents. (Photo credit: Wikipedia)

Issues that must be considered range from the financial to the emotional, according to an article on elderlawanswers.com.

The first thing to consider is the financial details. If the adult children who are taking in their parents have siblings, they should work something out so that the other siblings (those not taking in the parents) contribute something towards the costs of rooming and boarding the parents.

Costs can mount up. Besides food, one may need to do renovations or hire a home care aide.

Consider having your parents sign a contract under which they pay their children for taking them in. Maybe the parents can contribute to the remodeling or gift their own house to their children. There may be tax consequences to these actions to consider.

To avoid or reduce resentment and guilt down, family members should discuss everything out in the open at the outset. An elder law attorney can help work these things out.

Once the decision has been made, one should consider making the home senior-friendly. This may involve putting on an addition to the home, installation of  grab bars in the bathrooms, installation of ramps or conversion of a room on the first floor into a bedroom if necessary.

You may also be able to take a tax deduction by claiming your parents as dependants.

And make sure to seek out support from organizations such as local agencies that work on aging issues.

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Review Your Financial and Estate Planning Goals for 2014

January 23, 2014

Filed under: Beneficiaries,Estate Planning,Finances,Gifting,Taxes,Trusts,Wills — Neel Shah @ 7:08 pm

A recent article quoted financial planner Michael Joyce as saying, “There’s nothing magic about reviewing goals […], but it is a good time to refocus people on their financial goals.” Joyce’s statement could not be moretrue. It is good practice to periodically review financial and estate planning goals, and the end of the year or the beginning of a new year is a great time to check this off of the to do list.

English: Picture I made for my goals article

(Photo credit: Wikipedia)

Individuals should begin their review by checking the beneficiary designations on their retirement accounts, life insurance policies, 401(k) plans, and any other account with a beneficiary designation. It is important to not only ensure that a beneficiary has been named, but also that the named beneficiary is still appropriate.

Additionally, review the provisions in your will and trust documents. Consider whether any provisions need to be changed, added, or omitted. This is especially important if you have experienced a marriage, divorce, or the birth or death of a loved one since you first signed your will.

Individuals should also consider any tax law changes that will impact their assets. Tax laws are in constant flux, so a periodic review of applicable laws is the best way to plan to reduce anticipated taxes. This review should also include a review of gift tax limits, which may encourage an individual to increase year-end gift-giving in order to achieve a greater tax benefit.

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Considerations for Charitable Giving

September 24, 2013

Filed under: Charitable Giving,Finances — Neel Shah @ 9:00 am

The United States is home to thousands of charitable organizations that benefit everything from diabetes research to stray cats. These charities provide unlimited opportunities for people to contribute to organizations that support the causes that align with their philanthropic goals. A recent article describes how to plan for charitable giving.

An important part of charitable giving is balancing your philanthropic goals with your financial goals. Consider how to make your personal goals for charitable giving align with your overall financial plan. This consideration will help you determine how much you can realistically give.

Once you know what you can give, it is time to evaluate your giving options. Research various charitable organizations to find the one that best promotes your charitable goals. Realize that the best charity for you may be outside of your state, or even country, of residence. If you do not want to give funds directly to a charity, consider setting up your own foundation, donor-advised fund, or charitable trust.

It is also possible to donate your experience rather than money. Donations of time and human capital include serving on the board of a non-profit organization or sharing your professional expertise.

When You Aren’t Sure Where to Start: Having an Estate Planning Discussion with an Elderly Parent

September 4, 2013

Filed under: Estate Planning,Finances,Long Term Care,Power of Attorney,Trusts,Wills — Neel Shah @ 2:38 pm

A majority of adults find it difficult to discuss financial issues with their aging family members. Although these are often difficult and uncomfortable conversations to have, they are often necessary. Moreover, it is important to have these conversations with your parents early, before they become unable to handle their financial lives. A recent article discusses how to start this conversation, and what topics to cover.

One way to ensure that you bring up this topic is to make an appointment with yourself to do so. A good idea is to plan the discussion for after a family gathering such as a birthday party. This way, other family members can join in the conversation. If you believe that your parents and family members will be receptive to the idea, select a date and time and then invite them to join in on the conversation.

During the conversation, it is important to discuss several different aspects of your parent’s estate. The first aspect is legal. Determine whether your parent has done any estate planning. If yes, ask where the legal documents are and what estate planning tools are employed, such as wills or trusts. Your parent may also wish to explain any distributions.

Another important aspect to discuss is healthcare. Determine what types of health coverage your parent has aside from Medicare. This may include long term care insurance, or simply some money set aside for anticipated health care costs. Finally, determine whether your parent has executed a health care power of attorney. If he or she has not, encourage him or her to do so. This will be an essential step should the time come when your parent is unable to make their own decisions on their healthcare.