In addition to the "financial rescue" provisions of the recently enacted Emergency Economic Stabilization Act of 2008 there are a number of tax provisions included in the legislation that will benefit charitable donors. Charitable components included in the legislation are an IRA Rollover Provision, Basis Adjustment to Stock of an S Corporation Making Charitable Contributions of Property, Enhanced Charitable Deduction for Qualified Computer Contributions, Enhanced Charitable Deduction for Food Inventory, Enhanced Charitable Deduction for Contributions of Book Inventory to Schools, Temporary Suspension of Limitations on Charitable Contributions, Increase in Standard Mileage Rate for Charitable Use of Vehicles, and Exclusion from Income of Mileage Reimbursements for Charitable Volunteers.
For a summary of these and other provisions in the Act go to : http://poe.house.gov/UploadedFiles/Tax%20Credits%20in%20Economic%20Stabilization%20Bill_110th.pdf
Wednesday, October 8, 2008
Thursday, October 2, 2008
New FDIC Rules Regarding Accounts Held in Trusts
In response to the tumult in the financial sector, the FDIC announced Tuesday interim rules effective on September 26, 2008, regarding the extent of FDIC insurance coverage for bank accounts titled in living trusts.
Many people are unaware that the standard $100,000* coverage limit is generally increased for accounts titled in living trusts. Prior to the issuance of the interim rules announced yesterday, that increased coverage was determined by examining the identity of the trust beneficiaries, and the extent of their interest in the trust. Generally, the $100,000 coverage limit was leveraged so that $100,000 of coverage was extended to each "qualifying beneficiary." This meant that a trust for the benefit of parent during life, and payable to children A, B, C, D and E on parent's death, would receive a total of $500,000 in coverage if each of the children met the definition of "qualifying beneficiary" and if each of them had an equal stake in the trust (assuming the accounts titled in the trust at a particular FDIC-insured institution had an aggregate balance of at least $500,000). Because it was necessary to evaluate whether the beneficiaries were "qualified" (the definition of which is beyond the scope of this blog entry), customers were often unsure how much coverage they had, and processing of claims when institutions failed was often delayed. The new interim rules announced yesterday eliminate the need to evaluate the identity of the beneficiaries, and eliminate the need to confirm the extent of the beneficiaries' stakes in the trust. Therefore, the trust above would still receive $500,000 of coverage because there are five beneficiaries, even if A, B, and C were children receiving 90% of the trust (30% each), and if D and E were non-relatives receiving only 10% each.
Although the rules are still somewhat complex with respect to the evaluation of the amount of coverage when a depositor has multiple accounts at one institution, the interim rules greatly clarify the utility of living trusts in leveraging the depositor's FDIC insurance coverage. The full text of the FDIC announcement can be found at http://www.fdic.gov/regulations/laws/federal/2008/08sep26rule.html.
*Effective October 3, 2008, this figure has been temporarily increased to $250,000 and all figures discussed herein should be adjusted accordingly. The increase in coverage is currently set to expire December 31, 2009.
Many people are unaware that the standard $100,000* coverage limit is generally increased for accounts titled in living trusts. Prior to the issuance of the interim rules announced yesterday, that increased coverage was determined by examining the identity of the trust beneficiaries, and the extent of their interest in the trust. Generally, the $100,000 coverage limit was leveraged so that $100,000 of coverage was extended to each "qualifying beneficiary." This meant that a trust for the benefit of parent during life, and payable to children A, B, C, D and E on parent's death, would receive a total of $500,000 in coverage if each of the children met the definition of "qualifying beneficiary" and if each of them had an equal stake in the trust (assuming the accounts titled in the trust at a particular FDIC-insured institution had an aggregate balance of at least $500,000). Because it was necessary to evaluate whether the beneficiaries were "qualified" (the definition of which is beyond the scope of this blog entry), customers were often unsure how much coverage they had, and processing of claims when institutions failed was often delayed. The new interim rules announced yesterday eliminate the need to evaluate the identity of the beneficiaries, and eliminate the need to confirm the extent of the beneficiaries' stakes in the trust. Therefore, the trust above would still receive $500,000 of coverage because there are five beneficiaries, even if A, B, and C were children receiving 90% of the trust (30% each), and if D and E were non-relatives receiving only 10% each.
Although the rules are still somewhat complex with respect to the evaluation of the amount of coverage when a depositor has multiple accounts at one institution, the interim rules greatly clarify the utility of living trusts in leveraging the depositor's FDIC insurance coverage. The full text of the FDIC announcement can be found at http://www.fdic.gov/regulations/laws/federal/2008/08sep26rule.html.
*Effective October 3, 2008, this figure has been temporarily increased to $250,000 and all figures discussed herein should be adjusted accordingly. The increase in coverage is currently set to expire December 31, 2009.
Wednesday, May 7, 2008
Estate Planning & Probate News
In this quarter's Estate Planning and Probate Group eNewsletter, I wrote about how falling interest rates and stagnant or falling asset values are combining to create a unique window of opportunity for gift planning. In particular, the next several months will likely present one of the most advantageous periods in many years for creating a grantor retained annuity trust (GRAT).
Read the entire newsletter and article here: http://archive.constantcontact.com/fs045/1102017010064/archive/1102083698761.html
Read the entire newsletter and article here: http://archive.constantcontact.com/fs045/1102017010064/archive/1102083698761.html
Friday, April 4, 2008
On The Radio
On Thursday, April 3, 2008, I appeared as a guest on the Radio Show "Your Health Matters" on WKXL 1450 AM. The topic for the show was "Divorce and your Mental Health." I discussed the various aspects of a divorce and how effective legal representation during this process is a comfort to many. My colleague, Jennifer Casey, Ph.D. also appeared to speak about mental health issues common to people going through a divorce.
Unquestionably, divorce brings significant stress to a person's life. Not only is the person’s marriage ending, he or she may be involved in extended litigation regarding children, finances, and property. As Dr. Casey explained, even people who have never experienced any mental health issues in the past often have a need to enter therapy as a result of a divorce. To make matters worse, most people are unfamiliar with the laws governing divorces and the courtroom procedure. During the show, I emphasized how the involvement of a qualified divorce lawyer can alleviate some of the stress one experiences during this time.
Much of the law and procedure surrounding divorce in New Hampshire is a mystery to the average married person. During the breaks in the show, the host and I discussed some misconceptions in the law. For example, it is a common misconception that alimony is prohibited in New Hampshire. Another is the assumption that in a parenting dispute, Mom will receive primary parenting responsibility (formerly "custody") of the children because she is a woman. These misconceptions demonstrate the need for more public awareness and education regarding both parties' and children’s rights in a divorce or a parenting dispute.
I am pleased to have been a part of this radio program, and hope that the listeners were able to learn something new about New Hamsphire's divorce law.
Unquestionably, divorce brings significant stress to a person's life. Not only is the person’s marriage ending, he or she may be involved in extended litigation regarding children, finances, and property. As Dr. Casey explained, even people who have never experienced any mental health issues in the past often have a need to enter therapy as a result of a divorce. To make matters worse, most people are unfamiliar with the laws governing divorces and the courtroom procedure. During the show, I emphasized how the involvement of a qualified divorce lawyer can alleviate some of the stress one experiences during this time.
Much of the law and procedure surrounding divorce in New Hampshire is a mystery to the average married person. During the breaks in the show, the host and I discussed some misconceptions in the law. For example, it is a common misconception that alimony is prohibited in New Hampshire. Another is the assumption that in a parenting dispute, Mom will receive primary parenting responsibility (formerly "custody") of the children because she is a woman. These misconceptions demonstrate the need for more public awareness and education regarding both parties' and children’s rights in a divorce or a parenting dispute.
I am pleased to have been a part of this radio program, and hope that the listeners were able to learn something new about New Hamsphire's divorce law.
Wednesday, March 26, 2008
Jane, Stop this Crazy Thing
As a business transaction attorney, I am a first-hand witness to the personal energy, time and emotion that parties put into the purchase or sale of a business. All of these elements can be critical components to completing a transaction; they can, however, also cloud and complicate the decision to terminate negotiations and abandon a transaction.
When parties commence a business transaction it is often with the best intentions, good faith, but only a general agreement of the essential business terms of the deal. As the saying goes, “the devil’s in the details”. As lawyers, accountants, and other professional advisors become involved, the parties are forced to consider the transaction terms with much greater specificity. Moreover, there are almost always terms and conditions that are critical to the transaction that the parties did not consider in their initial discussions.
As the negotiations and preparation of the transaction documents move forward, the opportunity for a “stalemate” on a critical issue increases. Too often, such stalemates lead to protracted and unproductive negotiations. As a result the transaction may fall apart, or one or both of the parties may end-up with a transaction that does not meet their anticipated result.
Ultimately, a purchase agreement is a balance of risk and reward. The buyer or seller of a business must balance the potential reward of the transaction with the risk that the party must bear under the purchase agreement. When a “stalemate” occurs, a party should promptly assess the impact of the issue in question on that party’s risk/reward analysis. If conceding on the issue results in an unacceptable risk to the party (without corresponding reward), the party must either obtain the concession from the other party on that issue, or walk away from the transaction. The sooner this determination can be made the better.
In order to prepare to make decisions during the process of negotiating a transaction, a party should know its risk/reward profile, and prioritize its interests prior to undertaking a transaction. In doing so, with the assistance of its professional advisors, the party will be better prepared to make critical decisions during the negotiation process. A prompt but thoughtful decision may result in a resolution of the disputed issue; or a determination that the transaction is not in its best interest. Either way, the party will avoid an endless run around the treadmill with Astro.
When parties commence a business transaction it is often with the best intentions, good faith, but only a general agreement of the essential business terms of the deal. As the saying goes, “the devil’s in the details”. As lawyers, accountants, and other professional advisors become involved, the parties are forced to consider the transaction terms with much greater specificity. Moreover, there are almost always terms and conditions that are critical to the transaction that the parties did not consider in their initial discussions.
As the negotiations and preparation of the transaction documents move forward, the opportunity for a “stalemate” on a critical issue increases. Too often, such stalemates lead to protracted and unproductive negotiations. As a result the transaction may fall apart, or one or both of the parties may end-up with a transaction that does not meet their anticipated result.
Ultimately, a purchase agreement is a balance of risk and reward. The buyer or seller of a business must balance the potential reward of the transaction with the risk that the party must bear under the purchase agreement. When a “stalemate” occurs, a party should promptly assess the impact of the issue in question on that party’s risk/reward analysis. If conceding on the issue results in an unacceptable risk to the party (without corresponding reward), the party must either obtain the concession from the other party on that issue, or walk away from the transaction. The sooner this determination can be made the better.
In order to prepare to make decisions during the process of negotiating a transaction, a party should know its risk/reward profile, and prioritize its interests prior to undertaking a transaction. In doing so, with the assistance of its professional advisors, the party will be better prepared to make critical decisions during the negotiation process. A prompt but thoughtful decision may result in a resolution of the disputed issue; or a determination that the transaction is not in its best interest. Either way, the party will avoid an endless run around the treadmill with Astro.
Thursday, January 17, 2008
Mediation in Divorce: The Place of Contentment
I wrote an article to increase awareness about the use of mediation in a divorce case as a sensible and cost-effective alternative to litigation in appropriate cases. Parties and their counsel should know what to expect and what not to expect both from the mediator and the mediation process. Informing participants about the process before they participate in mediation may increase the likelihood of settlement. To learn more about the role of mediation in a divorce case, see:
http://nhbar.org/publications/display-news-issue.asp?id=4279
http://nhbar.org/publications/display-news-issue.asp?id=4279
Friday, December 21, 2007
"Would You Like to Supersize Your Contract?"
"You must have a form for that?" Business attorneys often hear that question from prospective clients when discussing a document they would like to have prepared. It may be an agreement relative to formation of an entity, a commercial contract, or an agreement for the purchase and sale of a business. Too often parties believe the lawyer has a "boilerplate" agreement into which the lawyer simply needs to fill-in the names of the parties and the dates.
Part of the value of hiring a seasoned business attorney is, indeed, to benefit from the prior experiences and work performed by the attorney in similar matters. Additionally, there is the benefit of efficiency and economy with an attorney who does not have to "re-invent the wheel" when working on a business agreement. Each commercial relationship, however, has its own dynamic and unique concerns which should be properly and specifically addressed in the governing contract. The provisions of the contract to address such issues cannot be "cut and pasted" from one agreement to another.
Your business attorney should take the time to ask you about the parties involved, the specific goals of the business relationship or transaction, standards and guidelines for performance by each party, timing concerns, and any unique issues that may arise in performance of the contract. These are matters that are unique to each contract. If these questions are not asked and, therefore, not addressed in the agreement, in the event a dispute should arise the agreement will provide little guidance in resolving the dispute.
A little extra time in the preparation and drafting of a business contract may save much time and many dollars in avoiding or resolving a subsequent dispute between the parties. There are no contract "Value Meals" to order.
Part of the value of hiring a seasoned business attorney is, indeed, to benefit from the prior experiences and work performed by the attorney in similar matters. Additionally, there is the benefit of efficiency and economy with an attorney who does not have to "re-invent the wheel" when working on a business agreement. Each commercial relationship, however, has its own dynamic and unique concerns which should be properly and specifically addressed in the governing contract. The provisions of the contract to address such issues cannot be "cut and pasted" from one agreement to another.
Your business attorney should take the time to ask you about the parties involved, the specific goals of the business relationship or transaction, standards and guidelines for performance by each party, timing concerns, and any unique issues that may arise in performance of the contract. These are matters that are unique to each contract. If these questions are not asked and, therefore, not addressed in the agreement, in the event a dispute should arise the agreement will provide little guidance in resolving the dispute.
A little extra time in the preparation and drafting of a business contract may save much time and many dollars in avoiding or resolving a subsequent dispute between the parties. There are no contract "Value Meals" to order.
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