Protecting Your Assets – A free seminar, March 2nd @ 10 AM at Black & LoBello office, seating is limited. RSVP Abe Geller 869-8801
On February 24, 2010,
in Estate Planning,
by blacklobellolaw
On February 9, 2010,
in Estate Planning, Finance, Landlord & Tenant, Real Estate, Taxes,
by blacklobellolaw
As we enter the second year of widespread foreclosures and short sales in Clark County, we are just starting to figure out how the banks will behave. Many are unaware that they can take proactive steps to minimize both the possibility and effects of when lenders pursue a deficiency action.
As always, the best defense is a good offense. The best option available to those with assets is to engage in a preemptive strike: asset protection. Several strategies can be used to properly protect properties, investments, and savings.
First and foremost, take advantage of state and federal exemption laws. Homesteads in Nevada are protected up to $550,000 worth of equity in a primary residence with a proper homestead designation. Other exemptions can be applied to funds in ERISA qualified plans and some of the cash values held in life insurance policies. This means, if you are sued or have a judgment against you, assets or equity held in exempt resources cannot be collected.
Next, a proper structure using business entities can be used to remove assets from your personal name and place them in the name of the business. This offers two types of protection; shielding a business from claims of its owners’ creditors and an owner’s assets from the claims of business creditors. In certain circumstances, business owners may also see tax benefits from proper business formation.
Take, for example, Ann and Tom. Ann and Tom have a house worth $400,000 that they paid cash for, and own a sole proprietorship business with cash accounts of around $50,000. Ann manages their business while Tom works as a pharmacist. They each have $50,000 in their 401(K)s and have about $10,000 worth of cash value in whole life insurance. They have three children, all under the age of 18. Unfortunately, they also own a rental property worth about $200,000 less than what they paid. They both signed on the loan. Ann and Tom also have about $100,000 in savings in their joint savings account. They are up to date on all of their mortgage payments but are thinking of a possible strategic default on the underwater investment property.
What can Ann and Tom do to protect their assets (home, 401(K)s, cash value, business assets) from potential claims if they default on their investment property?
There are many possible solutions for every situation. Here are some possible recommendations for Ann and Tom:
- File a Declaration of Homestead for their primary residence. This quick, inexpensive method may protect all of the equity in their home and involves only a trip to the Recorder’s office and approximately $20.00 in recording fees.
- Take advantage of state and federal deductions.
- As long as their 401(K)s are ERISA qualified, all of the funds are protected from any judgment rendered against them.
- Additionally, Nevada offers protection to Ann and Tom’s life insurance benefits as long as the annual premiums on the policy do not exceed $15,000.
- They may want to take some of their savings and put it into 529 plans to save for their children’s education, which have various tax and asset protection advantages.
- Set up a proper business structure.
- A sole proprietorship offers little or no asset protection for the owners of the business or the business assets. A better strategy is to form a Nevada limited liability company. This provides protection of the business’s assets from Ann and Tom’s creditors. Also, if the business itself is sued, Ann and Tom’s assets may be protected as well.
- Tom may also want to form a separate company for his pharmacy practice since that particular profession has a high risk of being sued.
- Pursue negotiations with the bank.
- Ann and Tom might try to negotiate a loan modification with the bank or work out a short sale. However, if they do not engage in proper planning before submitting their financial statement to the lender, the outcome could be less than ideal.
- Again, proper structuring is important. A short sale has many advantages over a foreclosure and Ann and Tom should sit down with a qualified attorney before deciding which courses of action to take.
Tiffany N. Ballenger, Esq.
On February 4, 2010,
in Elder Law, Estate Planning,
by blacklobellolaw
Nevada offers a Senior Citizen Tax Assistance/Rental Rebate program to persons 62 years of age or older whose annual household income was $26,677 or less. This applies to anyone who meets the age, residency and income requirements regardless of whether you own your home, live in a manufactured home, or rent your home.
The requirements are:
- 62 years+ by June 30 of the year of application;
- 2009 total household income must be less than $28,677 (including social security income);
- Must reside in Clark County for 6 months of the previous year;
- Applicant cannot have liquid assets that exceed $150,000;
- Applicant cannot own property (other than the residence) with value in excess of $85,700; and
- Homeowner’s assessed value may not exceed $571,000.
The application period runs from February 1 until April 30 of each year. There are also other types of rebates and benefits available to veterans, surviving spouses, disabled veterans, and legally blind individuals.
Tiffany N. Ballenger, Esq.
Many people either do not know what elder law attorneys do or just assume they sue nursing homes and write $100 wills. On the contrary, elder law covers a wide array of legal areas dealing with progressive life changes.
Traditional estate planning attorneys help clients plan for their estate which is necessary, but still insufficient for their needs. Very quickly, clients start dealing with issues including a developing disability, ongoing struggles with a spouse, and deaths of loved ones’. Considering the recent financial crisis, these issues add heavily to the stress of where best to spend money. Folks spend their retirement savings in less than a year for nursing home care. Families agonize over whether to send their kids to college or pay for a parent’s care in a skilled nursing facility.
Therefore, elder law should help people plan for their lives, not just their deaths. A great deal of elder law includes planning for payment of long-term care such as self pay, LTC insurance, Medicaid, or VA benefits. Clients can determine what options for long-term care work best for their family such as assisted living, home health care, or a nursing home.
Other areas of Elder Law practice include:
- Guardianship over a person, their estate, and many times, both;
- Not-so-traditional estate planning;
- Estate settlement;
- Advanced Health Care Directives & compliance with HIPAA laws;
- Access to benefits including Medicare, Medicaid, and VA benefits; and
- Financial and retirement planning.
As more baby boomers enter retirement, these areas of law will grow in demand as the need for advanced planning and long-term care increases.
Tiffany N. Ballenger, Esq.
On January 21, 2010,
in Civil Litigation, Corporate, Employment Law, Estate Planning, Finance,
by blacklobellolaw
Every time you visit the Regional Justice Center or Family Court, it seems they have implemented new security measures to protect the general public. With the recent rash of courthouse shootings and security blunders, walking into the courthouse has become reminiscent of airport security procedures and it is only getting worse.
So, to avoid holdups in line, take a few steps to ensure you will breeze through without any issues.
- Read ALL posted signs at or around the security checkpoint;
- Try to put jackets, coats, belts, and shoes through the X-ray before being asked to do so;
- Make sure your pockets are empty because even the smallest piece of metal will set off the metal detectors and cause delay;
- Place all loose articles in the provided baskets before you get to the X-ray;
- Keep moving since even a short pause can back up the line;
- Save all questions for the information booth located past security as questioning security personnel only slows down the process for everyone else;
Following these simple steps will ensure quick entry every time.
Jason D. Wilder – Management Support/Utility
On October 2, 2009,
in Elder Law, Estate Planning,
by blacklobellolaw
On September 24, 2009, clinic owners and operators Jose Martinez and Denise Martinez pleaded guilty at the U.S. District Court in Detroit to participating in a conspiracy to defraud the Medicare program, announced government attorneys Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney Terrence Berg of the 
Eastern District of Michigan and Daniel R. Levinson, Inspector General of the Department of Health & Human Services (HHS) announced.
Jose Martinez, 33, and Denise Martinez, 27, each pleaded guilty to one count of conspiracy to commit health care fraud before U.S. District Judge Victoria Roberts. At sentencing, which is scheduled for February 18, 2010, both defendants face a statutory maximum of 10 years in prison and a $250,000 fine.
According to court documents Jose Martinez, in September 2006, opened RDM Center Inc., a Canton, Michigan, medical clinic purporting to specialize in providing injection and infusion services to Medicare beneficiaries. Jose Martinez’s then-wife, Denise Martinez, managed and operated the clinic.
Martinez hired a physician and other employees to work at RDM Center in order to create the appearance that the clinic was a legitimate health care facility providing necessary services to patients. However, the clinic routinely billed the Medicare program for services that were medically unnecessary or never provided. Both defendants admitted that they purchased only a small fraction of the medications for which the clinic billed the Medicare program. Both defendants also admitted that patients were prescribed medications at the clinic based not on medical need, but on which medications were likely to generate Medicare reimbursements.
How did they pull this off? The “patients” were in on the scam. The so-called patients were not referred by legitimate doctors but instead were bribed with cash and drugs to pretend they received medications and treatments, when in fact, they did not. Medicare paid almost $700,000.00 of those false claims.
Readers are reminded to make sure the clinics they use are legitimate by getting referrals from doctors and using approved lists from their HMOs. If you have questions or are suspicious of a facility, check with the Health Care Fraud Prevention and Enforcement Action Team, or “HEAT,” at: www.stopmedicarefraud.gov.
Carlos L. McDade, Esq.
On July 10, 2009,
in Estate Planning,
by blacklobellolaw
On July 10, 2009, the Department of Justice issued a press release regarding the verdict in a Federal Court case regarding lease-in, lease-out (LILO), and sale-in, lease-out (SILO) tax shelters. The case involved a tax refund claim filed by Altria Group, Inc. Altria Group claimed the tax refund based on the purported tax shelter characteristics of the LILO and SILO investments.
According to the Justice Department, Altria claimed ownership of four investment properties, which were owned by tax-indifferent entities (i.e., entities that do not generally pay federal taxes), for the purpose of taking the tax deductions which those entities could not. In order to validly obtain the tax deductions, the entity must actually own the property. At issue in trial were the characteristics necessary to show ownership and whether Altria’s interests could be considered ownership under those characteristics. Altria claimed it met the tests. However, the jury found that Altria never acquired the benefits and burdens of ownership and that the transactions lacked economic substance. The jury accordingly rejected Altria’s $24 million refund claim.
The Justice Department reports that investors put money into hundreds of LILOs and SILOs in the late 1990s. There may be billions of dollars in claimed tax deductions from these type of tax shelters. The Justice Department reports that it has won in all four court cases in which the tax shelter was rejected and the tax deductions disallowed.
On July 9, 2009,
in Estate Planning,
by blacklobellolaw
Q: I’m a big fan of Michael Jackson and am so sorry that he passed away. While I was watching the funeral, I noticed that his children Paris, Prince and Blanket looked so sad. Then I found out their mother Debbie Rowe, and Grandmother Katherine Jackson may get into a big legal fight over their custody and money to raise them. If Michael Jackson had a will why didn’t it take care of these problems?
A: That is an excellent question. Of course, we are not privy to Michael Jackson’s will or estate plan so we cannot provide information on his specific situation. We can, however, give you some information on basic estate planning tools.
A will is a basic legal document that is a starting point for any discussion of an estate plan. A will explains to the world, and a judge, what you planned to happen to your family and assets after you pass away. A will allows you to designate specific property to be given to (“bequeathed”) specific persons, to select a guardian for your children if the other parent has predeceased you, and to choose whom you want to receive your property.
A trust is another estate planning tool. A trust is more flexible than a will, because you can use it while you are still alive. A trust is a legal arrangement in which the “grantor” transfers property to the trust for the benefit of a person or persons. The grantor appoints a “trustee” to manage the property and assets in the trust. A trust may be designed to protect the assets from a young, immature beneficiary until that person grows up. By using a trust, one parent can provide support to his or her children, without giving control of the money to an ex-spouse or ex-partner after a divorce. Trusts may also be used to care for elderly parents or disabled children.
Other estate planning tools include life insurance. Term life insurance provides coverage for periods of time. Whole life insurance can provide coverage for the rest of one’s life. There are also IRAs, mutual funds and stocks that can provide money for survivors.
A lot of estate planning advertising talks about “avoiding probate.” Probate is procedure that takes place in court. There are procedures, set out in Nevada law, which survivors must use to have the decedent’s assets pass to survivors. There are planning techniques that can be used to avoid probate in the correct circumstances.
Estate taxes are taxes charged by the federal government, and some states, on the amount of money and other assets left behind by the deceased. Some estate planning techniques may allow a person to legally reduce the amount of taxes that will be owed by an estate.
Estate planning can help a person plan what happens to their family and assets while they are alive and after they pass away. If you are interested in estate planning, consult a professional for advice and guidance.
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