Your Business and Taxes

Have you given serious thought to how your business is taxed (other than the fact that you believe it is taxed too much)? For many business owners, this area is often overlooked until taxes are due, and by that time many tax advantages available to business owners may have been missed. As 2012 comes to a close, and with the threat of the fiscal cliff and higher tax rates looming, now is the time to plan for 2013.

There are a number of entity selections for your business, and the most common types of business entities are Proprietorships, General and Limited Partnerships, C and S Corporations, and Limited Liability Companies. The two issues this post will focus on are how each type is treated from a liability standpoint, and from a federal tax perspective. Think of this as a broad overview of each entity type, and should you have more pointed questions, don’t hesitate to email me at Josh@theHElawfirm.com.

Proprietorship

This is the simplest form in which you can organize your business. There is only one owner, the Proprietorship is not considered a separate entity from that owner and no separate federal income return is required (you include the income on your Schedule C). A Proprietorship is a “flow-through” tax entity which means that the net profit or loss flows through to you and is accounted for on your return. You are taxed on all the net profit, even if you leave some cash in the business, and you do not receive a tax deduction for cash draws out of the business. Further, the net profit is subject to self-employment taxes and losses from prior years cannot be carried forward or backward to offset self-employment taxes in other years.

In my opinion, the greatest drawback of a Proprietorship is that you, as the owner, are personally liable for all the debts and liabilities of the Proprietorship. While this may be less of an issue for owners engaged in lower-risk activities with adequate insurance coverage, I believe by operating as a Proprietorship, you are subjecting yourself to unnecessary risk in addition to missing out carrying forward losses to offset future income.

Partnership

When two or more individuals or business entities create a business without forming a Corporation or other legal entity, a Partnership has been created (there are some minimal state requirements which must be met including filing specific documents and paying the appropriate fees). A Partnership also receives flow-through tax treatment. All income, loss, gains, deductions, and credits flow through to the partners. Partnerships that operate a trade or business will generally result in self-employment income or loss to general partners (but not limited partners).

The liability structure differs from the Proprietorship because a Partnership is considered separate from the partners. Therefore, the Partnership is primarily responsible for its debts and liabilities. However, if the company does not have sufficient assets to satisfy its debts and liabilities, the partners become responsible. Note the distinction between General and Limited Partnerships discussed below.

In a General Partnership, the partners share liability and management. In a Limited Partnership, the general partner(s) share liability and management, but limited partners are only liable for their capital contributions to the Partnership, and any debts the limited partner(s) personally guaranty. There are some circumstances where a limited partner could be held personally liable, but that is a conversation for another day.

Corporation

You have likely heard about C-Corporations and S-Corporations. Both types provide limited liability protection to owners (known as “shareholders”) as a shareholder is generally only responsible for Corporation debts and liabilities up to the amount of the shareholder’s capital contributions and any personally guaranteed debts. But beware of Courts “piercing the corporate veil” to render a shareholder personally responsible for Corporation debts and liabilities. This can be avoided by, among other things, complying with Ohio’s filing requirements.

A C-Corporation, considered a separate entity from the shareholder, is subject to a “double tax” regime, meaning income is taxed at both the Corporation level, and again at the shareholder level as dividends. A C-Corporation is not a flow-through tax entity. Losses do not pass through to the shareholders; rather they are either carried back to prior years or forward to offset future Corporation income. See the benefit realized by GM discussed at http://online.wsj.com/article/SB10001424052970203609204574314180298525294.html. Finally, the dividend distributions to shareholders are not deductible by the C-Corporation.

An S-Corporation is also considered a separate entity from the shareholders, but is a flow-through tax entity. Generally, any item of income, loss, gain, deduction and credit passes through to the shareholders. Similar to the C-Corporation, shareholders are not subject to self-employment tax on the company’s profits. An additional benefit of the S-Corporation is that there is no second level of tax.

Limited Liability Companies

The LLC is perhaps the most popular entity selected by business owners today. LLC’s offer the liability shield present with a Corporation, but with the flexibility to be taxed as a Proprietorship, C-Corporation, S-Corporation or Partnership. An LLC can have a single or multiple owners (called “Members”), and if a Member is an active participant in management, he or she will likely be subject to self-employment tax. Ohio’s filing requirements are minimal for an LLC, but be sure to have your Company Minute Book properly created and updated regularly to avoid problems with liability, Member-buyouts and the other common pitfalls for LLCs.

I did not discuss it here, but there are some intriguing ways to combine the business entities outlined above in order to benefit your business even further. If you would like to find out more, or if you have questions you need answered in more depth, I am available at Josh@theHElawfirm.com, or (614) 759-4603. 

Commingle Funds and Your Liability Shield May Disappear

Now that you have taken to heart the information provided in the previous post, Does your “LLC” really limit your liability?, don’t jeopardize the shield created between your business and your personal assets. I have often heard the phrase, “As a business owner, it is not ‘if’ you get sued but rather ‘when’ you get sued.” In determining whether a business owner is personally liable for the debts of a company, courts evaluate a number of factors, the most important of which is whether an owner’s personal funds have been commingled with the funds of the business. Frankly, if you treat your company as your personal piggy bank by using your company’s funds as your own, there is a good chance your personal assets will be exposed to your company's creditors (e.g., Plaintiffs suing your company).

Commingling takes a variety of forms, including but not limited to:

1. Failing to establish company checking and credit accounts that are separate from your personal accounts;
2. Utilizing company credit cards or accounts to pay for personal expenses;
3. Loaning money to or borrowing money from your company WITHOUT DOCUMENTING THE TRANSACTION (for example, record a resolution in the corporate minutes, execute a valid promissory note with fair market rate interest, and ensure that regular payments are made);
4. Depositing company funds (e.g., checks payable to your company) into your personal account; and
5. Failing to properly title company property.

While the list set forth above is by no means exhaustive, it does provide an overview of the most common examples of commingling that you should avoid. In addition to risking exposure to personal liability, commingling often results in understating or overstating deductible business expenses, as well as difficulty in creating financial reports and determining the best direction for your company.

Do not succumb to sloppy business practices, and be sure to document, document, and document. In the event that commingling does occur, correct it immediately. Maintaining the separation of owner and business is a critical component to protecting your personal assets.

As a business law attorney at Hallowes & Ebbeskotte, LLC, my goal is ensure that your business operates in a manner that protects you personally. If your company is a mess, and you need help cleaning it up, please feel free to contact me at Josh@theHElawfirm.com (or at 614-759-4603) or visit our website at www.theHElawfirm.com.

Does your “LLC” really limit your liability?

As a business owner, the question is not "if" you will be sued; rather, it is likely "when" you will be sued. To protect against personal liability, the Limited Liability Company (“LLC”) has become one of the more popular entities chosen by business owners to operate their respective businesses. The LLC provides the flexibility and ease of creation of a partnership while at the same time establishing a liability shield similar to a traditional corporation.

My experience in meeting with business owners is that there is a common misconception that so long as Articles of Organization are filed with the Ohio Secretary of State, the owners will get the full protection of the LLC. However, in order to be protected from personal liability, you must establish that the LLC is a separate entity from you as the owner (or owners). In order to do this, it is advisable to take some steps above and beyond merely filing the Articles of Organization.

First, you need to choose a business name and make sure it is available. In Ohio, the name of your LLC must contain some specific words, as well as be distinguishable from any other names on file (with some limited exceptions). Typically you complete this step before filing the Articles of Organization.

You should also negotiate and execute an Operating Agreement. An Operating Agreement will differ if the LLC is a Single Member LLC versus a Multimember LLC. Additionally, the Operating Agreement should address tax treatment, buy-sell options, management, capital contributions required from each Member and how profits and losses will be allocated. While there are template Operating Agreements available, an Operating Agreement should be tailored to your business, your Members and your specific situation to increase the likelihood of protection from personal liability.

At Hallowes & Ebbeskotte, LLC, we create and maintain a Company Minute Book for your LLC that includes all of your company documents, including the Articles of Organization, the Operating Agreement, Subscriptions to Membership Interests, Organization Minutes, Membership Interest Certificates, Descriptions of Membership Interests, and Capital Contributions.

Don’t forget to determine what tax and other regulatory obligations the LLC is subject to, along with any required registrations. These include requesting an Employer Identification Number (“EIN”), registering for Ohio payroll taxes and BWC coverage, and required notifications when new employees are hired.

Once the LLC has obtained an EIN, the Articles of Organization have been approved, any requisite local licenses and/or registrations have been obtained, and bank accounts have been opened on behalf of your LLC, you are ready for business.*

Remember, to protect yourself from personal liability, it is critical that you take the proper steps to establish the liability shield a limited liability company can provide. Visit http://thehelawfirm.com for more information on how the business law attorneys at Hallowes & Ebbeskotte, LLC can guide you through the necessary steps.

*Future posts will address the importance of refraining from co-mingling your personal funds and assets with the funds and assets of the LLC in order to maintain personal liability protection. Stay tuned…

Who Pays for Dad’s Nursing Home Stay? It Might Be YOU!

It is a common misconception that parents are supposed to pay for their children and not the other way around. However, more than half of the states in this country have enacted “filial support” legislation (including Ohio) that may be utilized by long-term care facilities to collect on mom and dad’s unpaid bills. Guess who they will be collecting from? It’s you.

This practice has only recently started to pick up steam as public sources of payment for long-term care (i.e. Medicaid) begin to lag due to overuse, abuse and underfunding. Considering the current state of the economy and public resources, it is expected that this practice will increase.

As you probably guessed, the best way to defend against this practice is through planning. When your parents (or you) are in their 60’s, that should be the “last stop” for this type of planning, because once the 80’s roll around, most folks generally need some type of consistent medical care (long-term or otherwise). Options include purchasing long-term-care insurance, utilizing irrevocable trusts to transfer assets outside of Medicaid’s look-back period (currently 5 years), and the ever-popular in-law suite. Whatever option you choose, understand that the most critical component of the planning process is to ensure that there is not a gap between private coverage and public coverage that will later rear its ugly head as a collection claim by the care facility against the children for mom and dad’s expenses.

If you have any questions, please feel free to contact me at josh@theHElawfirm.com or visit our website at http://thehelawfirm.com/. Our Ohio Estate Planning Attorneys can guide you through planning this phase of life, whether for you or for your loved ones.  

Estate Planning Update – Time is Running Out

On January 1, 2011, Congress rewarded good tax planners by increasing the individual estate, gift, and generation-skipping transfer (“GST”) tax exemption amounts, and included a tax rate of only 35% for any estates or gifts that exceeded the increased exemptions. Since the legislation became effective, the individual exemption amount has been $5,120,000. That means if at the time you pass away, your “estate” is worth less than that amount, your estate will not be taxed on the Federal level (the State of Ohio tax exemptions are significantly lower, but will be repealed on January 1, 2013 – i.e. no Ohio Estate Tax for those who pass in 2013). Alternatively, you may give away gifts in an amount up to the Federal limit without incurring any Federal tax (yes, you can be taxed for giving property away). The tax rate comes into play once the value of your estate (and gifts) exceeds $5,120,000. Ultimately, this legislation permitted individuals to pass along significant gifts and engage in creative estate planning while simultaneously taking advantage of a low tax rate. However, all that may change on January 1, 2013.

Unless Congress acts to extend the legislation, it will expire on December 31, 2012, and the exemptions and tax rate will reset to $1,000,000 and 55% respectively. While $1,000,000 may seem a high threshold, if your estate consists of your home, some vehicles, and a retirement account, that threshold can be easily breached. Additionally, the exemption is a “unified” exemption – that means it takes into account the value of gifts you have given away and the value of your estate, and if combined those values exceed $1,000,000, the 55% tax rate is triggered. Obviously, the reduced exemption in combination with the significantly higher tax rate can have devastating effects on your ability to preserve and pass along your assets to family and loved ones.

Perhaps your “glass-half-full” outlook has convinced you to believe that Congress will step in at the last moment to preserve the historical legislation that currently exists. That’s cute. The current consensus is that IF Congress does create new legislation that it will not be as generous as that in place now. For those looking to hedge, if the current exemptions and tax rate are extended it still makes sense to take advantage of them now to capture the appreciation most assets experience (unless you own real estate in Southern California).

There are a variety of tools that can be utilized to plan appropriately for the sunset of the current legislation. Don’t wait until December 30^th to contact your Estate-Planning or Tax Attorney (shameless plug – I can be contacted at (614) 759-4603 or at  http://thehelawfirm.com/contact-us/) and implement a strategy to take advantage of the current estate-planning opportunities. It is critical that you take the necessary steps to ensure your legacy is passed along to those you love, and the current legislation allows you to do so in an unprecedented manner. The future legislation may not be so accommodating.

Beware the Post!

For those of you who find it necessary to post on Facebook, Twitter, or other social media sites and blogs about everything in your life, you should reconsider that thought, especially when you are involved in any type of litigation (or trying to find a job). Facebook can and will be used as evidence against you in court. Many cases, especially those that take place in domestic court consist of “he said/she said” evidence. However, your social media posts (including pictures and videos) are admissible in court and may determine the outcome of your case.

For example, in a divorce case, one party’s Facebook post contradicted that party’s claims in court, and as a result, the Court ruled against that party. This is occurring more often as the frequency with which many people are updating their social media accounts. Another common misstep is when an individual denies drug or alcohol use but posts pictures of that person engaging in those activities. Not a good move.

You may believe that the content you post is protected because you have set your account settings to “Private” where only your friends or followers can view your updates. However, a common source of obtaining your account updates is usually through mutual friends (you would be surprised at what your “friends” will share with others). Understand that your posts are never truly confidential.

The lesson here is be conscious of what you post because it will affect your life. More importantly, if you are involved in any type of a lawsuit, custody battle, or job interview process, consider shutting down your social media accounts. Staying off your accounts will help, however, if you have negative material already posted, it will have a negative effect on your case. If you are going to post something, do so as if it will be read by the judge, jury and your adversary (because it probably will). 

If you have any additional questions, please feel free to contact me office at (614) 759-4603 or our website www.theHElawfirm.com. Good Luck!

Need Help Striking Work-Life Balance?

Believe it or not, it is critical to your health, your quality of life, and the impact you have on those around you to maintain a balanced life with job, family and other interests. Here are some practical tips for maintaining that balance.

1. Evaluate the benefits of a part-time or flex-time schedule. Specifically, a flex-time schedule may be appropriate in a career that is results-driven.
2. Consider working from home. This option has some obvious benefits, but it also presents some challenges that should be evaluated before committing to this decision.
3. Determine and set your work schedule and stick to it. Protect your personal and family time. While it may seem counterintuitive to limit your availability to clients, you will actually be more productive and effective by sticking to a predetermined schedule.
4. Limit or eliminate evening or Saturday appointments. This is consistent with number 3 and in addition to allowing you to maintain your sanity, will result in increased efficiency and effectiveness.
5. Make it a priority to schedule work and other office appointments around your family's events (including birthdays, anniversaries and school schedules). While building and maintaining a successful business requires dedication and sacrifice, if your job becomes more important than those close to you, your priorities should be reevaluated.
6. Remember to identify non-work time (in many cases this means the weekend) for family, friends and personal exploits and abstain from working during that time. Unless you are an on-call ER doctor, you can probably turn off the work cell phone.
7. Give lunch its due. While breakfast is the most important meal of the day, lunch provides a chance to allow your mind to process the first half of the day and reset for the afternoon. Until naps become a part of the accepted American workday, lunch is the next best thing.
8. If you are having difficulty committing to number 7, consider setting lunch appointments with friends. This way you are forced to take a break from work and, assuming you like your friends, you get the added benefit of social interaction with them.
9. As I believe in the importance of the mid-day meal, in addition to recognizing the benefit of being as productive as possible, I suggest also setting lunch meetings with colleagues to brain-storm and share ideas.
10. Organization of your day will also result in increased productivity and the peace of mind that follows routine. Consider taking the last 15 minutes of each day and identifying the tasks for the next day.
11. Train staff to handle calls, drop-ins and matters not requiring your immediate attention. Then delegate, delegate, delegate. Your effectiveness and efficiency should skyrocket as you take advantage of the excellent on-the-job training you have given your staff (you are providing training right?).
12. If you are not already on the right side of the digital divide, it is time to cross-over and start communicating through e-mail to increase convenience for providing responses. The time wasted trading voice mails should be better utilized.
13. Volunteer. Giving your time and talents to benefit the less fortunate will provide you with perspective regarding your own fortune, in addition to the joy that comes from helping others. Why are you complaining about your dirty shoes when the man next to you has no feet?

Networking, Networking, Networking

Regardless of your chosen career (or perhaps you are preparing to enter the job market) today’s economy demands that you establish and extend your personal and professional network. Opportunities are often discovered through the connections you have made in the marketplace and therefore increasing your connections will increase your opportunities. There are a myriad of online options that permit “networking” without the intimidation that make accompany introducing yourself to someone for the very first time; however, such networking alone is not the answer and is best used to complement meeting new people in the real world (that means you actually have to get out there and meet people – real, living and breathing people). Here are some tips to consider:

Alumni Groups. Contact the Alumni Offices where you earned your undergraduate and graduate degrees (high school alumni groups also exist). Inquire about Alumni Groups and events that may exist in your area. Additionally, you can usually find out if there are alumni that live in your area. Once you have located alumni, you actually have to take some action. If there is a group or event, attend and participate. To connect with individual alumni, consider putting together an email requesting coffee or lunch so you can pick their brain about their area of expertise (whether that area is a specific career or perhaps working in a new location). You will be surprised by the positive responses that many alumni provide.

Volunteer. Find a cause or entity (for example, a hospital) that you believe in and find a way to volunteer. Ideally, you should volunteer somewhere where you are likely to meet valuable connections that could generate business or lead to additional career opportunities. Of course, you can just volunteer because you love to give, but as this post is targeting networking for professionals, giving with an objective in mind is a good idea.

Networking Groups. There are endless choices when it comes to Networking Groups. They are appearing everywhere and while some are valuable, many are not. Look for groups that are specific to your geographic area. Additionally, be wary of groups that require you to submit a quota of referrals. In my experience this results in a quantity over quality approach for those referrals that are given to you, as well as puts you in the position to give out information of your own clients. Business is about relationships and in my opinion, a good networking group focuses on building relationships rather than each member filling their quota in order to remain in good standing with the group.

Gyms, Clubs and Other Social Activities. Fitness Centers, Social Clubs and other social activities such as golf and bowling leagues are excellent places to network with others. These environments are designed to increase interactions between participants and taking advantage of these interactions will allow you to build relationships with others. Again, keep your objectives in mind and try to join social activities that are consistent with those objectives (for example, if you offer health-related services and are looking for clients, you should join social activities that cater to clientele who need and are interested in your services).

Follow Up. The number one rule of successful networking is follow up. Once you have made an initial contact and met someone new, you should remember to follow up with them. It can be something as informal as an email or text to say that you enjoyed meeting them. If you feel the meeting was a beneficial one, take steps to develop the relationship. For example, if the individual you met is employed at a company you wish to work for, ask them if they will review your resume and provide feedback (great way to get your resume into their hands). Once they provide feedback and you have had additional interactions, ask them for guidance in getting your resume into the rights hands.

Successful networking will provide you with additional business and other opportunities that would probably not have occurred otherwise. Keep the tips set forth above in mind and remember that to network efficiently and effectively, you must develop your objectives and proceed accordingly. That being said, let’s do lunch?

Central Ohio Memorial Day 2012 Events

HAPPY MEMORIAL DAY 2012!!!!!!

GOD BLESS AMERICA!

 Please find Below a Schedule of Local Memorial Day Events

Canal Winchester: Memorial Day services will be held May 30 at 10:30 a.m. at Union Grove Cemetery in Canal Winchester. Mayor Michael Ebert will be the speaker. Also Buckeye Girls State Representatives will participate and Buckeye Boys State Representatives will speak.  The Boy Scouts, Girl Scouts, Brownies, Blue Birds, Campfire Girls, the Canal Winchester High School Band will also participate.  The program is sponsored by Leach Benson Post 220, American Legion Auxiliary Unit 220 and the VFW Post #10523.

Columbus: 9:00 a.m., flag-raising and salute conducted by American Legion Southway Post 144, Asbury Cemetery, 4737 Winchester Pike.

Dublin: 11:00 a.m., parade from the Bridge Pointe Center through the historic district to Dublin Cemetery, with a wreath ceremony on the Bridge Street bridge; 11:30 a.m., service at Dublin Cemetery; noon, commemoration at Grounds of Remembrance in Veterans Park; 12:30 p.m., free picnic lunch on the grounds of the Dublin Library

Gahanna: 1:00 a.m., Veterans Memorial Park, dedication of 31 new bricks with the names of veterans from American conflicts dating back to World War II.

Grove City: 11 a.m., parade from Our Lady of Perpetual Help Church to ceremony at City Hall, then to service at Grove City Cemetery.

Newark:  FRIDAY» Noon: Vietnam Veterans of America Chapter 55 hosts a free coffee break on Interstate 70 between Ohio 79 and Ohio 13. Will be offered until Monday. SATURDAY» 9 a.m.: Moundbuilders Veterans of Foreign Wars Post 1060 placing of flags on veterans’ graves at Newark Memorial Gardens. MONDAY » 7 to 9 a.m.: Free breakfast at American Legion Post 85, 85 S. Sixth St., Newark. » 9 a.m.: Vietnam Veterans of America Chapter 55 service honoring Vietnam veterans, Licking County Courthouse Square. » 10:15 a.m.: Newark Memorial Day Parade to begin at Everett Park and proceed to Cedar Hill Cemetery, where a ceremony is scheduled to start at 10:45 a.m. with guest speaker Newark Mayor Jeff Hall. Parade will begin forming at 9 a.m. » Noon: American Legion Post 85 free lunch. » 2 p.m.: Short presentation, including a 21-gun salute, followed by lunch, Moundbuilders VFW Post 1060, 469 Forry St., Newark.

Pataskala:  » 10 a.m.: Flag raising and prayer service at Pataskala Cemetery followed by flag raising by Scout Troop 21, prayer service and reading of names on memorial bricks at Veterans’ Memorial, Main Street. » 11 a.m.: Mead-Needham Museum, Main Street, opens to showcase military displays. The museum also will offer a free picnic lunch.

Powell: 10:00 a.m., parade from downtown to ceremony at Veterans Memorial in Village Green Park.

Sunbury: 10 a.m., parade starting at J.R. Smith Park.

Westerville: 9:45 a.m., parade from the corner of State Street and College Ave., pause at the old National Guard Armory on State, then proceed to Otterbein Cemetery. Address by U.S. Navy Commander John R. Sterba, a Westerville South High School graduate. From1 p.m. Friday until 1 p.m. Monday, annual Field of Heroes display of 2,500 flags at Westerville Sports Complex, 325 N. Cleveland Ave. Information atwww.fieldofheroes.org.

Worthington: 10 a.m., parade from Rt. 161 and High St., south to Walnut Grove Cemetery.

Top 10 Reasons to Make a Will

TOP TEN REASONS TO MAKE A WILL

1.     Determine where your property goes after you die

If you die without a Last Will and Testament, your property will be divided according to the Ohio Law of Descent and Distribution. You may find this surprising, but that law has no regard for your wishes involving your property after you pass away. Without a Last Will and Testament, instead of deciding who will receive your property, the legal system will distribute your assets after a lengthy and expensive probate process. For example, if you have no living relatives, your property goes to the State of Ohio. I somehow doubt that was your intention. Allowing your estate to pass to others without a will or trust can often be more expensive and time consuming and require court intervention than if you had taken the time to have a will properly created.

2.     Determine how your estate will be managed

If you die without a Last Will and Testament in Ohio, you will not be able to determine who will manage your affairs after you pass away. Rather, your remaining family members will have to hire an attorney to request that the Probate Court appoint an administrator for your estate. A costly administration bond will probably have to be posted with the Court as security and detailed accounts will have to be prepared. The result is several thousand dollars of additional expenses that could have been avoided by having a Last Will and Testament prepared.

3.     Designate Guardians and Establish Trusts for Minor Children

Should you and your spouse die prematurely, identifying a guardian for your minor children will ensure that they are cared for by the person you choose, rather than the person appointed by the Court. A Trust will ensure that the property left to your children is managed for their benefit without costly, court-administered guardianships. Additionally, a Trust can be prepared to stage the distribution of your property to match the age and degree of maturity of your children.

4.     Minimize the Costs of Probate

The cost of Probate may differ from jurisdiction to jurisdiction in Ohio. A ballpark range is 2% to 7% of the value of your estate (e.g., if you have a $300,000 estate, the probate expenses may be anywhere from $6,000 to $21,000, depending on where you are and how complex your estate is). A Last Will and Testament provides you the opportunity to take advantage of Ohio laws that allow you to avoid Probate and authorize the Executor of your estate to act without costly and time-consuming Court supervision.

5.     Minimize Estate Taxes

In Ohio, the current Estate Tax for estates over $338,333 but less than $500,000 is $13,900 plus 6% of the excess over $338,333. For estates over $500,000, the Ohio Estate Tax is $23,600 plus 7% of the excess. In addition to the Ohio Estate Tax is the current Federal Estate Tax Rate of 35%. These taxes can result in a significant decrease in the assets of your estate. However, with proper planning and a comprehensive estate plan, your tax liability may be reduced.

6.     Issues Involving Previous Marriages or Relationships and Divorce

Gifts passing to a spouse in an Ohio Last Will and Testament are automatically revoked upon divorce. This will result in any such gift passing to the “residuary” portion of your Last Will and Testament. Accordingly, the gifts will likely not pass according to your wishes. Therefore it is important to have your will updated in case of divorce. Also, without a Last Will and Testament, Ohio’s Statute of Descent and Distribution will require that certain shares of your estate pass to any of your children from a prior relationship. Usually these shares are different than the shares that will pass to your spouse and any children from a current relationship.  Finally, it is important to note that Ohio does not recognize common law marriages entered into after October 1991.

7.     Provide for Requirements of a Special-Needs Beneficiary

Dependents with mental or physical disabilities may have increased expenses for housing, personal assistance or other unusual expenses. A Last Will and Testament can be utilized to set aside funds and direct the administration of those funds to ensure a special-needs beneficiary is provided for. Usually, this is done by establishing a trust that permits money and assets to be distributed in a manner to maximize any disability support that may be available through the government.

8.     Disinherit a Child

This is usually not a popular decision, but if it needs to be accomplished, a Last Will and Testament provides you the opportunity to do so. The more likely situation is the desire to distribute your property unequally among your children because one them may have already received substantial gifts from you or perhaps another has special needs.

9.     Protect a Family Business

A comprehensive Estate Plan may be utilized to streamline the transfer of a business that you have spent your life building to the next generation in a manner that minimizes tax consequences and potential for conflict among family members.

10.  Avoid Do-It-Yourself Estate-Planning Services

Perhaps you are considering a DIY Estate Plan because it appears cheaper than hiring an attorney. Essentially, there is one potential situation in which DIY Estate-Planning products may be sufficient – you are (1) single, (2) childless, and (3) broke. If you do not meet all three requirements, DIY Estate-Planning poses a danger to you because the individuals working for  DIY Estate-Planning companies are not acting as your attorney; their legal documents are not a substitute for factual advice from an attorney; the information you submit is not reviewed for legal adequacy; and their information and forms are not guaranteed to be up-to-date, complete or accurate. In fact, most DIY Estate-Planning companies explicitly claim not to provide legal advice (this should be your first red flag). Providing for your family and loved ones after you pass away is too important to be cobbled together with legal duct tape and generic forms. Contact an Ohio Estate-Planning Attorney at Hallowes and Ebbeskotte, LLC to ensure your wishes are carried out. Additional Estate-Planning Information is available at  http://thehelawfirm.com/areas-of-practice/probate-wills-and-trusts/probate-administration-wills-and-trusts/.

“The bitterness of poor quality remains long after the sweetness of low price is forgotten.”

- Benjamin Franklin.

Do you have a trampoline?

Trampolines, swing sets, pools. All good things. All create liability. Unfortunately, no one realizes it until someone gets hurt. If you happen to offer these types of activities (in addition to a number of others) on your property, you should [strongly] consider having a Release of Liability form signed by those who participate. This type of Release can shield you from the liability that often results when someone is injured on your property. You may think it will be awkward to ask friends and family members to sign the Release, but it will be less awkward than being sued by them. “They would never do that” you say? That is what everyone says, right before they get sued. Contact me today and have a Release of Liability drafted. “What a fool does at the end, a wise man does at the beginning.” Anonymous

Do you have a lawyer “on-call”?

If you are reading this, it is likely that you have your own personal attorney “on-call”. I am generally available via Twitter (@joshdiyanni), Facebook and Linkedin Monday – Friday from 8:30am – 5:30pm. My hope is that you find those mediums a convenient and comfortable means by which to contact me with quick and simple legal questions. Additionally, if your matter is more complex, Twitter, Facebook and Linkedin provide a quick contact point through which we can communicate with each other. So if you have a question, concern, or just want to say hello, please feel free to contact me via any of the means listed above, in addition to the more traditional methods (i.e. phone or email).

Josh DiYanni

Hallowes & Ebbeskotte, LLC

Josh@theHElawfirm.com

(614) 759-4603.