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Recent Blog Posts
Things to consider before bringing in a business partner
Many business owners find that running a business is not a one-person job. There are countless responsibilities and expectations on an owner’s shoulders, from hiring and managing staff to developing products and business opportunities. A partner may bring valuable synergy if your talents vary a bit, and help expand the business. Having a partner may provide a welcome release valve, and allow each of you vacation time, and time away from the day-to-day needs of a business interfere with family or health obligations.
If you are thinking about partnering with someone in running a business take some time to consider:
1. Have you partnered professionally before? Even if you and your potential partner are family or life-long friends, the experience of running a business together can be unlike anything you’ve experienced before. If you are new to this arrangement, proceed with caution and only after extensive planning. There may be more than a business relationship on the line: there can also be a friendship or family connection at stake.
A line between enforceable and unenforceable prenup terms
Prenuptial agreements are increasingly becoming mainstream. Not only do you see only the very wealthy or high-profile couples doing them, but lots of people who simply have specific assets or marital interests they want to protect are taking this very important, and valuable step before marriage.
And while the meat and potatoes of most prenups are the terms relating to full disclosure of financial terms and division of assets upon separation or death, other terms "governing" the marriage or relationship are often added. Care must be taken, however, not to cross the line between terms that are uniquely specific and clauses that may be unenforceable.
Understanding lifestyle clauses
Contracts of any kind are most enforceable when their terms are clear and specific. It is important to use precise language, objective measurements and distinct descriptions, as ambiguity or overreaching are the enemies of enforceable contracts.
It can become daunting or bordering on impossible to craft enforceable provisions when parties contemplate regulating their marital expectations with what has become known as lifestyle clauses. These terms refer to those that are not financial but have to do with personal habits and behaviors. Infidelity, appearance standards and housework allocations are some of the lifestyle clauses making their way into prenups, and they can be grounds for contest.
Which assets should I include in a prenuptial agreement?
Creating a valid prenuptial agreement before marriage is an effective way to shield certain property and assets from division in the event of a divorce.
If you are considering having a prenup in place, then it can be wise to examine the items you own and determine what you may want to include in your agreement. Below are some common types of property that people protect with a prenup.
Types of property to include in a prenup
If you or your partner owns the following types of property, it would likely be prudent to address them in your prenup:
- Family heirlooms and property
- Business interests
- Real estate, including rental property
- Intellectual property
- Inheritances (received or anticipated)
- Pets (which are property in the eyes of the law)
- Investments
- Debts
- Retirement benefits
That difficult talk about end of life arrangements
While the old adage is "nothing is certain but death and taxes," that doesn’t mean we like talking about either. This can be especially true when discussing end-of-life arrangements with older loved ones. However, as unpleasant as this conversation can be, it may be a necessary one, and it can save them and you from even greater difficulties in time. Here are a few ways to make this conversation easier and more productive.
Bringing Up the Topic
Broaching the topic in a sensitive and gentle way will help set the stage for the rest of the conversation. Aging Care has a great tip on how you can get this going: talk about your own end-of-life arrangements. Start a conversation about the difficulties you might face by not preparing, and from there, move into asking them about their own arrangements. You might find that they’ve wanted to discuss the matter, too, but also found it difficult to bring up. At the end of the initial conversation, leave the door open by saying something like "Let’s talk about this another time," so you can easily pick up where you left off later.
Millennials: 4 reasons why you should have an estate plan
Men and women in the younger demographics often assume they don’t need to think about estate planning because they don’t have much to protect. They might still be looking for a career and paying off student loans; they may not have a house, spouse or children yet.
However, if you are a millennial, or even part of Generation Z, you may not want to dismiss the idea of an estate plan just yet. Actually, you could have more to protect than you think, if you stop to think about it.
Your health
An estate plan is not just about protecting assets. It also protects your wishes in terms of your health and health decisions. For instance, as this article discusses, an advance care directive can specify the medical measures you would and would not want if you become incapacitated. You can also give someone power of attorney, allowing him or her to make healthcare and financial decisions on your behalf – – invaluable if you do become incapacitated, temporarily or permanently, and particularly important if you’d rather not leave those decisions to chance, or to next-of-kin.
Legal counsel crucial when buying, leasing commercial property
If you run a business in Maryland, you likely play many roles on any given day. You might be dealing with employment matters in the morning and by the afternoon, you could be making crucial decisions about new products and services, and in between juggling phone calls, emails and texts demanding your immediate attention.
In other words, business owners have a lot on their plates. Adding in the play-by-play of acommercial real estate transaction can put you over the top. To get back to the business of running your business, consider working with an experienced attorney to facilitate the process. In fact, getting legal guidance with these matters can prove to one of your best decisions for at least a few reasons.
Negotiating terms
Whether you want to lease or buy commercial space, expect to negotiate. One or both parties may want to adjust lease terms, payment structure or restrictions. Rather than managing this element of a purchase or lease agreement alone, you can work with an experienced attorney to handle such matters as you choose to delegate, while retaining final say-so on decisions. Unlike a real estate broker, whose interests are aligned with getting to closing to earn his commission and then moving on, your real estate attorney is your advocate, promoting your interests, and working to save you from missteps.
How a special needs trust can protect your child
When it comes to parenting, you know your child better than anyone else. The same is especially true if your child is special needs. You know their routine and the environment that they thrive in. You also understand what it is they will need as they grow and continue through life.
Keeping these needs in mind is especially important when putting together estate plans. While there are many reasons anyone could benefit from having a trust set up, it is particularly beneficial for your child if you set up a special needs trust. This can help them both now and into the future, especially when it comes to protecting their access to government benefits.
Special needs trust keeps assets low enough for benefits
If your child does receive – or will receive – government benefits, such as Supplemental Security Income, their assets cannot total more than $2,000. If they have assets over $2,000, this could result in no longer being able to receive benefits.
Creating estate plans: Preparing after the birth of a child
Now that your little bundle of joy is here, it is time to talk estate planning. Just like how you checked finding a pediatrician and decorating the nursery off your to do list, now is also the time to make sure everything is in place in case anything ever happened to you and your partner.
A will is one of the most important documents you will create after the birth of a child. This document not only specifies how your assets are to be divided, but it should also list who your child’s guardian is. This is a matter not to be taken lightly, as a guardian is someone who will raise your child if something were to happen to you.
While some parents choose a brother or sister to act as their child’s guardian, others choose a close friend or other family member. No matter who you choose, since it is such a large and life-changing responsibility, make sure you talk to this person beforehand and make sure they are up to the task before finalizing documents with your attorney.
If This is December, It’s Time to Consider 529 Qualified Tuition Plans
Got a kid or grandchild headed to college….sooner or later? December is a great time to set up and contribute to a 529 plan, to take advantage of this year’s annual gift exclusion amount. 529 plans are an efficient and cost effective way for parents and other family members to help pay for accredited post-secondary educational expenses. “529” is a reference to the Internal Revenue Code section setting out the terms and conditions for qualified tuition plans. All 50 states and the District of Columbia, as well as many state educational institutions, provide or spo nsor 529 plans where income earned on assets are not subject to federal income tax and may not be subject to state income tax if ultimately used for qualified educational expenses.
Properly structured contributions to 529 plans can also avoid federal gift tax. Annual contributions of up to the annual gift tax exclusion amount per beneficiary ($14,000 in 2017 and $15,000 in 2018) are not subject to federal gift tax (provided no other gifts are made to the beneficiary during that year), plus married couples may effectively double their contributions. In addition, contributions also may be front loaded for up to five years, provided the donors file a federal gift tax return to make the five-year election. However, in order to take advantage of front loading annual exclusion amounts, the donors must survive for the entirety of the five-year period; if the donors pass away during the five-year election period, contributions allocated to the remaining years after death will be included in the taxable estate of the donors.
Have you heard about the changes for 529 education savings plans?
Previously, 529 plans could be used only to cover costs for college and other post-secondary educational expenses. The new tax bill changes that, allowing use of 529 savings plans to support children’s K-12 education, and authorizes 529 accounts withdrawals for public, private or religious schools. With this expanded flexibility, families not currently setting aside money for education may want to reconsider earmarking some savings toward a 529 plan.
Home schooling families are also allowed to use 529 funds towards educational expenses. The expanded rule limits the benefits to $10,000 per year, per child.
The new legislation also further supports funding of “ABLE” accounts designed for use by people with disabilities. Under the new law, one can roll over 529 plan assets to an ABLE account. Both accounts must have the same beneficiary or a member of the same family, and allows rollovers up to the annual gift exclusion amount, which will be $15,000 as of January 1, 2018.
With offices in Bethesda, Silver Spring, and Washington D.C., The Eleff Law Group provides legal help to clients throughout the surrounding areas, including North Bethesda, Chillum, Potomac, Chevy Chase, Germantown, Takoma Park, Wheaton, Rockville, Towson, Glen Burnie, Bel Air, Montgomery County, Prince George's County, Baltimore, County, Loudoun County, and Fairfax County.
12305 Kemp Mill Road, Silver Spring, MD 20902
301-857-1990
