Top 10 Reasons to Create an Estate Plan

Top 10 Reasons to Create an Estate Plan

1. Avoid Probate If you have assets valued at more than $100,000 that are not in trust or other instrument which avoids probate, then in Illinois then your estate will need to go through probate proceedings. Probate is the process for your estate to pay all its final bills and debts and for the remaining assets to be distributed to your heirs, either according to your will or, if none, according to state law. This is done under the probate court’s supervision. This process takes a minimum of 6 months to complete. There are additional costs for attorneys’ fees and court costs. 2. Make Your Choices Now While You Can No one knows when they may lose the ability to make their own choices. Whether it be a temporary issue such as being in an accident, or more permanent such as dementia or alzheimers. Making your choices now ensures that issues will be handled the way you’d like them handled, and by the person you choose to handle them for you. 3. Provide for Minor Children If you don’t create a trust for minor children, then the court will appoint someone to handle the money for them until they turn 18. That guardian of their assets will have to report to the court each year to provide an accounting of how the money is being used. 4. Avoid Lump Sum Payments Without a trust, when your children turn 18 they will be given a lump sum of their share of the estate assets. Most clients at AMC Legal prefer to spread out the inheritance over time to avoid wasting...
Trademark Scams: How to Spot Them

Trademark Scams: How to Spot Them

Shortly after filing a trademark application, with the United States Patent and Trademark Office (USPTO) or with another non-US, government trademark agency, a growing number of our clients inevitably receive one or more official-looking letters or invoices seeking payment related to the trademark registration. You may have received one of these notices in the mail or via email yourself—a solicitation, formatted to look like an official government document, that lists data about your trademark application and even an image of your trademark (all of which is publicly available information). Many of these companies use terms that resemble an official agency name including one or more of the terms “United States,” “U.S.,” “Trademark,” “Patent,” “Registration,” “Office,” or “Agency.” The truth is, these solicitations have absolutely no legal or other significance to your trademark registration. If read carefully, you can see that the solicitations provide useless services such as listing the application on an internet database or sending a reminder that an issued registration is up for renewal sometime in the future. Some of the solicitations don’t even disclose what services they are providing. These worthless notices are convincing and tend to solicit significant amounts of money from the trademark owner, often exceeding the actual fees necessary to register a trademark. Unfortunately, some trademark owners pay these invoices, believing they are legitimate, official invoices, because they are unaware of the scams and do not read the solicitations carefully. Any official postal correspondence regarding your trademark registration or application in the United States will be from the “United States Patent and Trademark Office” with an address in Alexandria, Virginia. Any emails related...
Multi-Member LLCs Must Update the Operating Agreement

Multi-Member LLCs Must Update the Operating Agreement

If you are an owner of a multi-member LLC and being taxed as a partnership then it’s time to revisit your Operating Agreement. Not sure if you are taxed as a partnership? Most LLCs with more than one partner are. Bipartisan Budget Act of 2015 (BBA) You may be wondering, why am I writing about a law signed in 2015 when it’s already 2019? It’s a little-known rule that didn’t get much publicity and only took effect on January 1, 2018. It’s coming up now that multi-owner LLCs are preparing to file their 2018 tax returns. What does it change? Before the BBA, the Tax Equity and Responsibility Act of 1982 (TEFRA) audit procedure required the IRS to perform audits at the LLC/partnership level. If there were any adjustments to be made, they would be passed through the LLC and collected from the partners. After the BBA, the IRS will collect any amounts owed directly from the LLC, rather than the individual members. This makes it easier for the IRS to collect amounts owed. The IRS no longer has to chase down individual owners to collect their share of the tax underpayment. The IRS can now collect the money directly from the LLC and leave it up to the LLC to collect a reimbursement from the members themselves. What effects does this have? If the LLC is audited and there are amounts due to the IRS, the LLC will pay the deficit and the LLC will have to try to collect from the members individually. This also means that the current members may wind up with the tax liability...
Will vs. Trust: Which One is For Me?

Will vs. Trust: Which One is For Me?

Will vs. Trust Which One is For Me? A common question in estate planning is do I need a Will or a Trust.  The simple answer is, it depends on what you want to accomplish.  Below we review the differences between a Will and a Trust and the benefits of each. What Does a Will Do? A will tells those you leave behind what you want to do with all of your property and assets.  If you have minor children you can also list the guardians you elect in the will as well.  Have a well written will can have many benefits, but it does not avoid probate. What is Probate? If you have assets valued at more than $100,000 that are not in trust or other instrument which avoids probate, then in Illinois then your estate will need to go through probate proceedings. Probate is the process for your estate to pay all its final bills and debts and for the remaining assets to be distributed to your heirs, either according to your will or, if none, according to state law.  This is done under the probate court’s supervision.  This process takes a minimum of 6 months to complete.  There are additional costs for attorneys fees and court costs. Benefits of a Trust 1) Avoid Probate 2) Provide for Minors 3) Avoid a Lump Sum Inheritance 4) More Privacy 5) Easier to Manage after Death Avoiding Probate When you create a Living Revocable Trust you can retain control of your assets while you are alive with the added benefit that aAll assets funded to the trust  do not need to go through the...
How the New Federal Tax Law Could Affect Your Estate Plan

How the New Federal Tax Law Could Affect Your Estate Plan

    Many people sign an Estate Plan and then lock it away in a drawer and never look at it again.  But every good Estate Plan needs consistent review to make sure it’s up to date with your current needs and current laws. Now is the time to take that Estate Plan out of the drawer and have it reviewed by your attorney. What is Estate Tax.  When assets are transferred after death they could be subject to an estate tax, both at the federal and state levels.  However, there are exemptions based on the value of the estate. The estate will be subject to tax on the amount that exceeds the federal or state tax exemptions. Portability. The concept of portability was introduced by the federal government in 2013. It allows a married couple the opportunity to use the full exemption for both spouses. For example, assume the federal tax exemption were $5 million. If Mary and John are married and John has an estate worth $3 million at his death, Mary could carry over John’s remaining $2 million of exemption and apply it toward her exemption at her death, making her federal tax exemption $7 million. Federal and State Estate Taxes.  Keep in mind, there are separate federal and state estate taxes and Illinois does not allow for portability. New Tax Act. The Tax Cuts and Jobs Act signed into law on December 22, 2017 brought with it great changes for estate tax planning. The new law eliminated taxes for many higher income families. It doubled the federal estate tax exemption from $5.6 million per individual...
Non Profit Annual Filings

Non Profit Annual Filings

Your Non-Profit Deadlines are Approaching Federal Tax Filings It’s time to contact your accountant to be sure your federal tax return is filed properly and on time. Most Non Profit Tax Returns are due by May 15th.   If your gross income is $50,000 or less you can file a very simple electronic postcard tax return.  If your organization fails to file for 3 consecutive tax years then the IRS will revoke your tax exempt status.  Please consult an accountant for other potential state tax filings such as if you have employees, state tax filings, if your gross income is over $50,000 or for other tax questions.     Attorney General Filings Each year you must file an annual report with the Illinois Attorney General which is due no later than June 30th for the previous tax year.You may request a 60 day extension but it must be received no later than June 30th. The annual report fee is $15 and there will be a late fee of $100 assessed if you file late. If you are a church or religious organization and filed for exemption then you will not need to file the annual report. Illinois E Number Have you been in business over year? If so, have you filed for your Illinois E Number?  You can apply for an Illinois sales tax exempt number (E Number) once you have at least one year of financial history for the organization.This will allow you to purchase items for your organization without having to pay sales tax on those items. Need Help? Give us a call. 630-590-3640...
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