Posts Tagged ‘Family’

What gift to get for that awkward family member

  We have all received a few dodgy presents in our time. More often than not these fall into the ‘novelty’ category – and they are just that, a novelty; which soon wears off. I’m sure there are very few of us who would not admit to also having bought such a present. Not that these gifts are without their place, a gift is something designed to give its recipient pleasure, and if it makes them happy for even a few moments then it was probably worth it. It is after all, the thought that counts.   But many gifts are thoughtless, and are bought with no motivation other than a simple sense of obligation. These are often for family members we have little contact with at other times of the year- Christmas and birthdays, the last bastion of the extended family in the 21st century.   These are the presents that are bought with the least thought, or at least, the least information about what their recipient would like and therefore the least chance of getting a present they would enjoy for any significant period of time or find, dare I say it, useful.   And so in these situations we resort to the generic staples for the recipient’s age group. The very young will receive a toy (which, to be fair, they would probably be delighted with), but then it gets harder and harder- the teenagers receive the ubiquitous store credit vouchers, the young adults receive household knickknacks and ‘gift sets’ of cheap aftershave and shower gel, and before long we are buying grandma a box of chocolates.   Now obviously there are no simple answers to this conundrum as the problem by its very nature arises from everybody being different. And so we have to focus on unifying factors, universal truisms that can be applied to age groups.   So what can we say of adults? Everybody has their favourite tipple. In fact, I guarantee that if you discover what a person likes, and then buy them that favourite bottle of plonk every year, they would be nothing but grateful. An appreciated present is a good present.   For older people of say, middle age onwards, there is another unifying condition – aches and pains. Almost everybody has some kind of recurring complaint, and a gift that helps to relieve that really would be ‘a gift that keeps on giving’. Magnotherapy devices such as magnetic bracelets can help to treat many conditions from rheumatoid arthritis and carpel tunnel syndrome to a bad back or any other joint or muscle pain. Besides the relief from symptoms they would enjoy every day, they would also be wearing your present every day- a daily reminder of your gift that will remind them of you for years to come.   Another appreciated and more unusual gift is a magazine subscription – especially if you know that they regularly buy the magazine for themselves anyway. And again, they will be reminded of you all year- it is like giving 12 gifts spread out over an entire year at once.    

Credit union workers help family in need

Credit union workers help family in need
Four branches of 1st Financial Federal Credit Union “adopted” one area family for Christmas through St. Louis Crisis Nursery’s Wentzville location.

Read more on Suburban Journals

Insurer okayed out-of-network care for heart patient but family faces huge bill

Insurer okayed out-of-network care for heart patient but family faces huge bill
RICHMOND — Five months into pregnancy, Jodi Lemacks discovered that her unborn son had a severe heart defect and would require a complex operation as soon as he was born. But the local pediatric heart surgeons didn’t inspire confidence.

Read more on Washington Post

Why Use Family Limited Liability Companies?

Copyright (c) 2009 Jeffrey MatsenEstate Planning experts and professionals often refer to Family Limited Partnerships (“FLPs”) and Family Limited Liability Companies (“FLLCs”). Most professionals now utilize FLLCs instead of LPs because FLLCs are less complicated to form and the manager of the FLLC is not personally liable whereas the general partner of a limited partnership is. Because the general partner is personally liable, another liability shielded entity like an LLC or a corporation has to be formed to be the general partner. This is an additional expense, inconvenience and complication that the FLLC avoids. The following explanation helps to understand why the use of Family Limited Liability Companies can be so advantageous. What is a FLLC? A FLLC can be utilized in your estate plan for making “leveraged” or “discounted” gifts to your children. A FLLC is simply a partnership arrangement between family members. Typically, the FLLC is established by parents or grandparents for purposes of making gifts to junior family members, while allowing the senior family members to maintain full control over the management and investment decisions relating to all of the underlying FLLC property. How Do You Organize and Set Up a FLLC? To establish a FLLC, the parents would transfer property to the FLLC in exchange for a 100% member interest thereof. Typically, the parents would hold the member interest as Trustees of their Family Trust. The parents in the beginning would be the managers of the FLLC with sole control over the FLLC and its property. At some point in time, the parents would begin gifting a portion of their 100% member interests in the FLLC to their children, but the parents can retain complete control over the day-to-day investment and management decisions relating to the property. The children members do not have to have any voice in the management of the FLLC. What are the Asset Protection Features of the FLLC? One of the strongest reasons for creating an FLLC for real estate is that the FLLC protects the real estate owner’s personal assets from attack by the creditors of the FLLC. The FLLC itself is liable for its debts and claims against it and the asset that it holds, but the owners of the FLLC are not liable for these claims. For example, if you personally own a rental duplex and someone is injured at the duplex and if the injury claim is not covered by insurance either because the insurance amount was insufficient or the claim was excluded from coverage, the person asserting the claim can not only go against the rental property, but all of the owner’s other personal and business assets. However, if the duplex is owned by an FLLC, the claim can only be made against the FLLC and the property which the FLLC and the other assets of the owner cannot be attacked. There are also some other asset protection feature to FLLCs which are beyond the scope of this article. We are preparing an article on “Asset Protection Planning and the Use of FLLCs” and reference is made to that article for further explanation of the foregoing. How Does the FLLC Save Estate Taxes? The FLLC can also be drafted to provide that the children members will not be allowed to transfer their member interests during their lifetime without the consent of the other members. This restriction on the transfer of the member interests will discount the value of the gifted FLLC interest for gift tax purposes by reducing its marketability (“marketability discount”). Because the children members will not have any voice in the management of the FLLC, the value of the gifted FLLC interest will be discounted to reflect this lack of control (“control discount”). Combined, these two discounts are sometimes referred to as the “minority discount” and typically reduce the value of the transferred interest for gift tax purposes by 20%-60% (and the taxes by 10-25% or more), depending on what type of assets are held by the FLLC (a greater discount is typically allowed when the assets held by the FLLC are not readily marketable, e. g. , closely-held securities, interests in real estate, etc. ). Senior Family Members Retain Control Over FLLC Property. The parents can maintain control over the FLLC property for as long as they like. This plan can be drafted to make the parents the manager with sole management control over the FLLC. The children can have as much or as little control as the parents want them to. Does the FLLC Allow Me to Transfer Control to My Children? The FLLC is an ideal vehicle to transfer control of the family business or other property to your children as quickly or as gradually as you wish. Often the first step to developing responsibility in children is to provide them with a small share of the family business or family investment property that will attract and develop their interest. The FLLC is flexible enough to allow you to transfer control and responsibility of the business or investment as you see fit. Why and When Should I Start Making Gifts to My Children? After the FLLC has been established, your FLLC could be used as part of your estate plan to make “discounted” lifetime gifts to your children. Alternatively, the interest in your FLLC could be held until the first of your deaths, after which time the surviving spouse could then begin making gifts of the FLLC interests to your children. This second use of a FLLC has a double benefit; the survivor will receive a full step-up in basis of the underlying FLLC assets for income tax purposes after the first death, and following the survivor’s death the FLLC interest could still be discounted for estate tax purposes. How Can the FLLC Help Me Make Discounted Lifetime Gifts? If you establish an FLLC and subsequently make lifetime gifts of the FLLC interests to your children, the FLLC interest would entitle your children to all of the economic benefits from their gifted FLLC interest, but without any management authority relating to the FLLC property. Because of the restriction, as discussed above, the FLLC interest has a reduced value. The value of any FLLC interest you give to your children during your lifetime will be removed from your estate for estate tax purposes. Following your death, only the value of any remaining FLLC interest you still own will be includible in your estate for estate tax purposes. The restriction on transfer referred to above, has an added benefit when the FLLC interests are gifted to your children, since the restriction will provide some protection from a child’s judgment creditor (such as a divorced spouse). A child’s creditor will not be allowed to reach the underlying FLLC assets to satisfy a judgment, but rather will only be entitled to the child’s economic interest in the FLLC – i. e. , the right to FLLC distributions, if any. How Does the Reduced Value Help With Annual Giving? The minority discount of the value of the FLLC interests allows you to effectively make larger annual tax fee gifts. For example, if for gift tax purposes a 40% discount is allowed for the FLLC interest (due to the minority discount), you could transfer FLLC interests representing up to $20,000 in “underlying” FLLC assets without exceeding your annual gift tax exclusion of $12,000 per donee ($20,000 X 60% = $12,000). Under current law, your annual gift tax exclusion allows you to transfer up to $12,000 per year to each individual without such transfer being subject to gift tax; together you and your spouse can transfer up to $24,000 per year (in the above example, your combined annual gift tax exclusions would allow for a transfer of $40,000 in “pre-discount” FLLC interests). As can be seen by this example, the discount associated with your gifted FLLC interests will allow you to transfer a greater amount of “underlying” FLLC assets, without exceeding the amount of your annual exclusions from gift tax. Continuing this example, if you wish to use your unified credit to shelter the gift tax on FLLC interests in excess of your annual exclusion amount, $1,666,667 in FLLC interests could be transferred without exceeding the $1,000,000 amount sheltered from tax by your unified credit ($1,666,667 X 60 = $1,000,000). Under current law, your unified credit will shelter the first $1,000,000 of transferred assets (whether during your lifetime) from gift tax. If both you and your spouse wish to use your unified credits to transfer FLLC interests to your children, using the above example of a 40% discount in the value of the FLLC interests, up to $3,333,334 in underlying FLLC assets could be transferred without paying any gift tax ($3,333,334 X 60% = $2,000,000). We trust that the foregoing explanation will assist you in better understanding the Family Limited Liability Company (“FLLC”) as a vehicle in your estate and tax planning.