Government and Personal Debt 

Filed under: Articles on Tuesday, January 29th, 2013 by dkw | 113 Comments

Are you, like the federal government, having more debt than you have income?  You are not alone.  The question is what to do about it?

The news seems to be telling us that the federal government does not have enough tax dollars to pay the costs of governmental operations and that it must borrow money to stay in business.  That sounds familiar.  But, do we have the added problem that when we go to the bank to borrow money to pay our bills, the bank says No.

As I understand it, the government has an “out” you and I do not have.  The government can obtain more money to pay its bills by increasing the debt-limit previously set by Congress.  Once that limit is increased the government can borrow more money and pay its bills.

President Obama and Congress are arguing about all of this with the President saying to Congress: Authorize an Increase in the Debt-Limit.  If you don’t, Social Security Checks and Veterans’ benefits could be delayed and government workers and vendors would not get paid and another economic crisis could be upon us.

Congress is saying to the President:  Before we authorize an increase in the Debt Ceiling government spending must be reduced.  Again, on the personal level, such approach sounds familiar.

The question then is: What government costs (and at the personal level what operating costs) can be reduced?  There are certain costs that are “musts” if the government and us, at the personal level, must incur just to keep going.

Of course, there is another way.  At the government level, increase taxes.  At the personal level, increase sale prices.

Which should it be, reduce expenses or increase sales?  If it is to be to reduce expenses, what expense reductions can the government, or those of us seeking to make enough to care for our family, put into effect?

I would be pleased to hear from anyone reading this commentary their answers to the questions raised herein.  My e-mail address is cmccarter@mccartergreenley.com. My post office address is Suite 2100, One Metropolitan Square Building, St. Louis, Missouri 63102-2751.  No phone calls please.

Fictitious Name Statute 

Filed under: Articles on Wednesday, February 1st, 2012 by dkw | Comments Off

Do You know that if you operate a business in Missouri under a fictitious name, you must renew that fictitious name every five years with the Secretary of State? It’s true. And it does not matter whether you are operating just as a person or as a general partnership, a corporation, a Limited Liability Company, or other form of business organization.

This statutory requirement came into effect on August 28, 2004 and provided that the registration is only good for five years. So, unless you have renewed your registration, it has now expired and you need to renew such registration right a way.

If your company is out of date, call us and we will take the needed steps to re-establish your identity as a business organization here in Missouri.

Proposed 2011 Taxes 

Filed under: Articles on Thursday, December 9th, 2010 by dkw | Comments Off

Thought You’d Like to Know

As you may know from the public media, President Barack Obama and Select Members of Congress struck an agreement regarding various forms of taxation.  The recommendations of the group now go to Congress for consideration and possible enactment into law.  The Wall Street Journal reports that if Congress acts affirmatively and the President signs the bill Congress passes, most of the following tax laws will be in effect for the next two years.

Estate Tax:

  1. The first $5,000,000 of property will be exempt from estate taxation.
  2. The top estate tax rate will be 35% down from 55%.

Gift Tax:

Current Law remains in effect.  You can give up to $13,000 per donee using the “Annual Exclusion,” plus you have a “Lifetime Exemption” of up to $1,000,000.  Gifts of the “Annual Exclusion” amounts will not be subject to Estate Taxation at your passing.  Plus, increases in value of “Annual Exclusion” property will escape Estate Taxation.  On the other hand, gifts using the $1,000,000 Lifetime Exemption are subject to Estate Taxation at your passing, however, as with Annual Exclusion gifts, increases in value of Lifetime Exemption property will escape Estate Taxation at your passing.

Income Tax:

Employees’ share of Payroll Tax is reduced from 6.2% to 4.2%

Extension of credit for college students to offset tuition costs granted.

Some 22 million families are exempted from the Alternative Minimum tax.

Expansion of $1,000 Child-Tax Credit to more families.

Up to 100% expensing  of business investments, including plants and equipment will be possible.

There will be an extension of Credits for Research and Development.

For Unemployed Workers, there is an unemployment benefit package.

As you know, our office concentrates its practice in the fields of estate and gift tax planning and implementation, income tax law, business law, trust law, probate law, as well as other laws.

Once the above laws are enacted, we plan to hold several Free Seminars and there explain the new laws to those interested in knowing how to save taxes as they proceed with their daily lives.

We plan to invite only 16 to each seminar, so everyone attending can ask questions and learn how to plan their lives to take full advantage of all of the new laws.

These new laws come to us as hoped for remedies for the vestiges of the recession our country is experiencing.  We need to take full advantage of them and do our part, not only for our personal benefit, but also for the benefit of our Country.

We hope to see many of you at our Seminars.  They will fly under the banner of Legal Ease (Law Made Easy). And we will try to do just that and make our comments understandable and useful.

We will be in touch again soon.

Charles and Bev

What is a Trust? 

Filed under: Articles on Wednesday, October 20th, 2010 by dkw | Comments Off

By: Charles C. McCarter

I am often asked “What is a trust?” Typically, a trust is a written document designed to be of benefit to your loved ones. The trust document appoints a person or trust company to act in your place when you are no longer living or are otherwise unable to make decisions concerning the property you own. This person or company is called a trustee. The trustee picks up where you left off with the handling of your property or assets such as your residence, certificates of deposit, savings and checking accounts, stocks, bonds, land, annuities, life insurance, and other assets. The trustee, in your place, does with your property what you would have done had you continued to live and been able to take care of your own property, pursuant to your direction as recorded in the trust instrument.

Thus, the trustee manages your property and uses your property in such a way as to make money (income). This income is then used, much as you would use it, to pay bills and pay out the balance to your loved ones for their use. For example, the net income can be paid to your spouse to take care of his/her needs during life and thereafter paid to your children, grand-children or other loved ones. The trustee, much as you would, also sometimes sells some of the property or assets in order to have enough money to take care of those loved ones or sells the property and buys something else that would seem to be useful or provides a source of income.

Generally speaking, the property which you own is referred to in a trust as the trust principal and the money which is made from investing and managing that trust principal or property is called income. The income is typically reportable for income tax purposes to the Internal Revenue Service and to the State.

The trustee can have the power to buy, lease, sell, and otherwise dispose of property. The trustee also can have the power to borrow and mortgage property. With such limitations as you wish to impose, the trustee can have the same powers as you now have during your lifetime. Thus, your choice of trustee is one of the more important decisions you will ever make.

Fortunately, there are very experienced trust companies and banks available to serve as trustees and often there are highly qualified individuals who will also be willing to serve as trustees. However, any trustee you choose should be someone who is extremely familiar with decision-making concerning investments and the management of your property.

Most lawyers stand ready to be of assistance to anyone wishing direction as to their choice of trustee. Good estate planning lawyers work with many trustees throughout the United States. Thus, they can provide guidance and counsel concerning your choice of trustee.

Unfortunately, without such documents as Revocable Trusts and Irrevocable Life Insurance Trusts in place at your death, your family may face extremely high taxes and probate costs. But fortunately, with Revocable Trusts and Insurance Trusts in place, many of these unwanted costs can be avoided or at least minimized. Thus, such taxes and probate costs are permissive costs. You can either permit them to occur or you can take steps to prevent them from occurring. It is up to you.

In order to learn how these unnecessary costs can be avoided or minimized, you need to talk to an experienced estate planning attorney. You need to think of him/her as your friend. For that is what a sincere and dedicated estate planning attorney is. Your insurance agent will know the outstanding estate planning lawyers in your community. You could ask him/her for the name of a lawyer who can help you.

About the Author: The author has practiced and taught law for over 40 years.  He has written many professional articles for publication and is co-author of a two volume work entitled, Missouri Lawyer’s Guide.  He holds a Master’s of Law degree from Yale Law School and was a Visiting Scholar there in 1980.  He is a biographee in Who’s Who in America.  Martindale-Hubbell has granted him their highest rating.  He is happy to visit with you regarding your estate planning questions in an effort to help you find solutions that best fit your needs.  He may be reached by e-mail at info@mccartergreenley.com.