Don L. Ross Recognized as Legal Elite

Posted on June 20, 2011 by | Leave a comment

Don L. Ross and John P. Fowler were named as two of the Top 35 attorneys in Northern Nevada by Nevada Business Magazine. The 2011 Legal Elite list represents the top attorneys in Nevada. Nevada has 10,584 licensed attorneys and of those, this year’s 135 (between Southern and Northern Nevada) represent the top one percent. These attorneys have received one of the highest endorsements possible; a recommendation from other lawyers in Nevada.

Congratulations to Don and John for their well-deserved honor!

Leave a comment

Posted in Award

Tagged , , , , ,

Sloppy Gifting of Real Estate Leads to IRS Mess

Posted on May 31, 2011 by | Leave a comment

The idiom “pigs get fat, hogs get slaughtered,” is directly relevant to the current, generous gift tax exemption.  During 2011 and 2012, donors may gift up to $5 million in assets without paying any federal gift tax.  The limited window of opportunity, depressed real estate prices, and liberal exemption amount are enticing factors for donors to transfer highly appreciated and/or highly valuable real estate.   Typically, the giver transfers the real estate to one or more family members.

Despite the fact that gift tax is not owed on many of these real estate transfers, the giver must report any gift in excess of $13,000 to the Internal Revenue Service (“IRS”).  The donor must file Form 709 to report U.S. gift taxes to the IRS.  Irrespective of whether tax is due and payable or the transfer is made to a family member, Form 709 must be filed for gifts in excess of the annual exclusion amount.

A recent Wall Street Journal article noted that the IRS is scrutinizing gifts of real estate to family members.  The IRS has obtained real property transfer information from 16 states.  The small sample size revealed noncompliance rates  in excess of 50% which will likely spur on additional IRS examinations of real property.   While this is a favorable time to make gifts of real estate, seek assistance from trusted counsel to properly transfer real estate.

by: Jason C. Morris, Esq.

Leave a comment

Posted in Gift, Tax

Tagged , , ,

Estate Planning for Young Adults

Posted on May 17, 2011 by | Leave a comment

A recent survey found that 92% of adults under age 35 do not have a will.  Many of my own friends and colleagues fit this description.  The most common explanations I hear are (1) they feel that they do not have enough to justify a will or (2) they do not have the means to pay for a will.

As for the first rationale, the label “estate planning” conjures up images of vast wealth and property ownership.  In reality, your “estate” comprises all of your personal and financial interests.   Providing your family and heirs some direction with regard to your assets lifts a major burden off of their shoulders in the midst of their grieving.

For married couples with children, the primary function of a will should be to name a guardian for their children.  Informally asking a family member or friend to look out for your children is insufficient.  For single parents, there is ever more urgency to name a guardian.  In the event of a simultaneous death, who will become the caregiver for the children?

In addition, for couples with children, would you like your children to receive their inheritance outright at age 18?  Without any planning, your children will receive money due to them upon reaching the age of majority.  As wonderful as your children may be, few are capable of handling money very well at such at an early age.    With some basic will drafting, money and assets can be held in a custodial account until your children are at least age 25.

As for the cost of planning, many young adults overlook the cost of probate.  Simply put, you will pay during life or after death.  Under Nevada law, if your estate totals more than $20,000 you must file a petition in court to distribute those assets.  Even college students with several electronics (laptop, iPad, cell phone), a meager checking account, and their own car can surpass this threshold.

The probate statutes are designed to pass your assets to your family.  Most people would like to have a say in how their earthly possessions will pass on to loved ones.  Would you rather choose how the assets pass or allow the state to determine their succession?

Also, any good estate planning attorney will prepare documents to assist with incapacity planning.  As young adults we tend to be more active and also subject to potentially incapacitating injuries.   You should state who you would like to make medical and financial decisions on your behalf.  As a result of the well publicized Terri Schiavo case, many are aware of the family entanglements that can ensue without these documents.  Medical and financial powers of attorney are vital components of your estate plan.

Most do not blink at paying for home, auto and health insurance.  Similar to these “just in case” protections, a simple estate plan acts as a safeguard for you and your family.  For help with your estate planning you should contact a qualified estate planning attorney.

Leave a comment

Posted in Estate Planning, Probate, Wills

Tagged , , , , , ,

Don L. Ross Presents at “It’s Your Estate” Seminars

Posted on April 21, 2011 by | Leave a comment

KNPB Channel 5 and the Community Foundation of Western Nevada, along with 10 other non-profit sponsors, present a series of free, in-depth workshops on estate planning and family financial planning, “It’s Your Estate.”

Don L. Ross, Esq., will present on advanced estate planning topics including AB trusts, life insurance trusts, and grantor retained annuity trusts.  Don will present at the following times and locations:

Tuesday, April 26, 2011, 11:00 a.m. at the North Valleys Library, 1075 North Hills Blvd #340, Reno.

Wednesday, April 27, 2011, 2:00 p.m.  at the Spanish Springs Library, 7100 Pyramid Highway, Sparks.

Thursday, April 28th, 2011, 3:00 p.m. at the South Valleys Library, 15650A Wedge Parkway, Reno.

You can call Sandy at the Community Foundation 775-333-5499 to reserve your spot at the class location of your choice!

Leave a comment

Posted in Asset Protection, Estate Planning, Probate, Tax, Trusts, Wills

Tagged , , , ,

Advantages of Nevada Limited Liability Companies (LLC’s)

Posted on March 29, 2011 by | 5 comments

Many know that Nevada has a tax favorable climate for business and legal entities.  Nevada does not collect individual, corporate, inventory, franchise, gift, business occupation or stock transfer taxes.  One of the preferred forms of operating a business is through a limited liability company (“LLC”).

An LLC is a hybrid entity offering the legal protection of a corporation combined with the “pass through” taxation advantages of a partnership.  The owners of an LLC are called “members” (rather than partners or shareholders).  A Nevada LLC does not pay taxes and the tax consequences pass through to the LLC members.  Yet, like a corporation (and unlike a limited partnership) all of the members enjoy limited liability.  In other words, there is no one similar to the general partner in a limited partnership that must be fully liable for the debts and obligations of the LLC.  Thus, if administered properly the LLC enjoys the benefits of partnership taxation without exposing anyone to unlimited liability.

Nevada is one of the most difficult states in which to “pierce the corporate veil” or enforce personal liability for the debts and actions of the LLC on its members.  Just like a corporation, if the LLC’s owners treat it as a separate entity (e.g., they observe certain formalities, do not commingle assets, do not make personal use of company assets, etc.), then the courts will generally treat the entity as separate from the members and will not hold them responsible for liabilities of the LLC.

Under Nevada law, a charging order is the sole legal method for creditors suing you personally to attack your assets held in an LLC. For example, if you are a member of a Nevada LLC and have a day trading account, a boat and a duplex held in an LLC and are sued personally, a creditor would not be able to seize your assets. They would instead have to obtain a charging order over your membership interests in the LLC, entitling them to receive a portion of income earned by that LLC.  If the LLC did not earn any income, then there would be no profits to be distributed.  The judgment creditor cannot compel any such distribution that is not required by the company’s operating agreement and cannot force a dissolution of the company.

Members (owners) and manager of the LLC need not be residents of Nevada (or even U.S. citizens) and do not need to come to Nevada to form the LLC.  Member meetings may be held anywhere in the world.

A Nevada LLC can own property in any state without having to be incorporated in that state. Nevertheless, the Nevada LLC may need to qualify to do business in the foreign jurisdiction.  Such qualification could lead to paying foreign taxes.

The Managing Member of an LLC can deduct 100% of the health insurance premiums he or she pays, up to the extent of their pro-rata share of the LLC’s net profit, because the profit is considered earned income.  If a member has earned income, he or she will also qualify.

When considering whether to form an LLC, you consult with a trusted attorney.  Beyond the filing documents required by the Secretary of State, you must prepare appropriate governing instruments.

5 Comments

Posted in Asset Protection, Tax

Tagged , , , , ,