How to Pass On Family Heirlooms Without Causing a Family Feud

From Brett Lee Shelton, Family Business Lawyer™
The holidays are traditionally the time for family gatherings, where generations come together and perform holiday rituals that have been passed down through the years. Part of those rituals includes material possessions – a well-worn set of silver at the holiday table, grandmother’s china or treasured tree ornaments from childhood.
When we sit down to that holiday meal, rarely do we contemplate Susie and Sally engaged in a bitter fight over the sterling butter knives. But it happens. A lot.
To ensure that family memories are kept in a good place, your estate plan needs to include the orderly disposition of your material possessions. Unbeknownst to a lot of us, these possessions can hold special meaning to younger generations, and a family feud that could be in the offing can be avoided by advance planning.
As part of your comprehensive estate plan, you may want to consider distributing some material possessions to your heirs prior to your death. If not, then you need to be sure you specify exactly who you want to get what by:
• Listing in detail each item and the name of the intended recipient
• Sharing this list with your estate executor as well as with your family
• Including the list within your last will and testament or other estate planning documents
If you’d like to learn more about estate planning strategies for your family, call our office today to schedule a time for us to sit down and talk. We normally charge $750 for a Family Wealth Planning Session™, but because this planning is so important, I’ve made space for the next two people who mention this article to have a complete planning session at no charge. Call 303-255-3588 today and mention this article.

The Family Business: Avoid These 4 Lethal Legal Mistakes

From Brett Lee Shelton, Family Business Lawyer™
If you operate a family-owned business, or are considering starting one up, there are four potentially lethal legal mistakes you should take care to avoid, including:
No employment agreements. Family members who work together are usually hesitant to confront one another if someone isn’t pulling their weight. Having an employment agreement for everyone ensures that expectations for job performance are spelled out and what the grounds are for termination.
Mixing family and business finances. Many family businesses start with loans from various members, and as the business grows, those initial investments need to be protected. This is the stage when you want to consider setting up your family enterprise as a limited liability company (LLC) or a corporation. Most small businesses use an LLC structure, which provides liability protection for personal assets and allows for company profits to flow through to owners.
No licenses. Even if you operate out of your home, you will likely need to obtain a local, state or federal license to operate your family business. While licenses are generally inexpensive, the fines for not having them can be costly. You can find out what the requirements are in your area by contacting your city hall or county office.
No succession plan. Family business feuds can easily occur when there is no succession plan in place. In addition, legally speaking, if a business has not been incorporated or formed as an LLC, the business dies when its owner does. If you started a family business to keep it in the family, you need to follow through with a formal succession plan.
If you’re a small or mid-size business owner, call us at 303-255-3588 today to schedule your comprehensive LIFT™ (legal, insurance, financial and tax) Foundation Audit. Normally, this session is $1,250, but if you mention this article and we still have room on our calendar this month, we will waive that fee.

Rough Justice in Indian Child Welfare

Article in 100 Reporters by Stephanie Woodward, discussing SD struggles with Indian Child Welfare. Partner Brett Lee Shelton is quoted near the end. Full article follows link.

http://100r.org/2012/12/rough-justice-in-indian-child-welfare/

In a basement interrogation room in South Dakota, agents of the state’s Department of Criminal Investigation were on the firing line. A group of Native American children were claiming sexual and physical abuse by their white adoptive parents, whose home they first entered as foster children.

South Dakota was already under Congressional scrutiny for the high number of Native children it takes from their homes and tribes and then places, for the most part, with white foster families or in white-run group homes—seemingly to claim a higher share of federal foster care funding.  Though Native children make up about 13 percent of South Dakota’s child population, they are typically more than 50 percent of those in care, according to federal figures.

The state’s response to the Native children’s accusations against their white parents offers a rare look into South Dakota’s foster care system, which places 9 in 10 Native children in state foster care with white families or white-run group homes. The state’s actions also raise questions about the commitment of officials to protect Native children taken from their natural families, particularly when homes that are presented as safe havens turn into places of abuse.

Startlingly, the agents who summoned the children to the interrogation that day in November 2011 were working hard to get the youngsters to recant their abuse claims. State officials also brought charges against the deputy state’s attorney and a child welfare advocate, Brandon Taliaferro and Shirley Schwab, who moved to stop the abuse. Their trial on charges of getting the children to lie about the abuse is set for January 7, 2013.

That day, Sheriff’s deputies had taken the children out of school, court records show, and brought them to the basement room, with its table, chairs, one-way mirror, and recording equipment. One by one, the children faced Agent Mark Black of the Department of Criminal Investigations and a partner. The children were each alone, without an adult present on their behalf.

 
While being questioned by the agents, the children became fearful and wept, according to someone familiar with the case who asked not to be identified for fear of retribution. The youngsters were apparently not told they were being recorded. While left alone for a time, one explored the room, discovered the camera equipment behind a peephole, and began to cry.

The DCI video of the interrogation is now a court document. In a four-minute excerpt that can be seen on YouTube, the agents are taking a break. They’re off-camera, apparently unaware that the microphone is still picking up their voices as they plan their strategy.

One agent says the children “have been f—ing with us.” The men talk about questioning the therapist to whom the children described the sexual assaults. Agent Black says, “I guarantee we put [her] in here. Put the f—ing hot screws in her. Bitch you’re in f—ing deep shit. You better start talking.” Later Black says, “At least we f— with Brandon.”

Taliaferro had brought charges against the adoptive parents in 2010, following a police investigation of the children’s abuse allegations. He charged the parents nearly three dozen felonies, including incest, rape, sexual exploitation and cruelty toward five children, the youngest 5 years old when the alleged abuse started in 2003. Schwab, the children’s court-appointed special advocate, supported Taliaferro’s action. Local news media followed the case avidly as it developed.

Since the interrogation, Agent Black has testified multiple times that his questioning aimed to get the children to recant their abuse claims and to say that Taliaferro and Schwab had encouraged them to lie about the abuse, but the youngsters never did. Nevertheless, the state moved on the two whistleblowers, raiding their homes and offices and hitting them with felony and misdemeanor charges related to persuading the children to lie. Later testimony would indicate that investigators had turned up no evidence of this.

In May 2012, Michael Moore, the state’s attorney prosecuting the case against the adoptive parents, dismissed charges against the mother. She had been accused of witnessing sexual assaults on the children and failing to protect them. The state returned the children to her and gave the father a deal. He admitted to one count of raping a child younger than 10 and was ordered to serve 15 years in prison, making him eligible for parole after seven and one half years. (100Reporters is withholding the parents’ identities to protect the children’s privacy.)

Frank LaMere, director of the Four Directions Community Center. / PHOTO: STEPHANIE WOODARD 

Frank LaMere is a prominent Indian child welfare advocate and director of Four Directions Community Center, a Native nonprofit in Sioux City, Iowa. He called for a federal investigation into South Dakota’s foster care system and predicted that this latest situation may become South Dakota’s Penn State. “This is a scandal of the highest order,” said LaMere.

A Very Bad Year

Late 2011 was a difficult time for South Dakota’s foster care system. In addition to facing this latest abuse case, the state was working out a financial settlement in the so-called Jane Doe lawsuit. It had been brought on behalf of a 9-year-old foster child who was reportedly sexually abused over a period of two years in a group home. Schwab was one of the whistleblowers for that case as well, she said.

Then, days before Black’s interrogation of the Native children and the searches of Taliaferro’s and Schwab’s premises, National Public Radio broadcast a scathing report, charging South Dakota with rampant taking of American Indian children into foster care. The network said the state receives $100 million dollars annually in federal funds on behalf of foster children of all races, giving it an incentive to keep the numbers of children in care high. Alarmed, six House members had asked the federal Bureau of Indian Affairs to look into possible violations of the 1978 Indian Child Welfare Act, intended to keep Native children within their Indian families and communities.

A new report by South Dakota tribal officials also confirms the findings of the earlier NPR report, which state officials had contested. The tribal report accuses the state of “willfully” and “systematically” violating the Indian Child Welfare Act (ICWA) and taking Indian children “at least partly to bring federal dollars into the state.” The document came from a committee of ICWA directors in South Dakota, the tribal child welfare officials tasked with enforcement of the Indian Child Welfare Act.

On December 7, Congressmen Ed Markey (D.-MA) and Ben Ray Lujan (D.-NM) sent a tough letter to the Bureau of Indian Affairs. Markey is the ranking Democrat on the House Natural Resources Committee, which has jurisdiction over Indian affairs, and Luhan is ranking member of the subcommittee on Indian and Alaska Native affairs.

Citing the tribal report, the congressmen pledged to renew an earlier request for the House to investigate South Dakota for possible “misappropriation of federal dollars to state coffers.”

“This has gone on long enough,” said Markey.

Markey and Lujan also reminded the Bureau of Indian Affairs that 14 months ago, House members asked the agency to hold a “summit” on the situation. Congressman Tom Cole (R.-OK) and three others had gone even further.  In a move reminiscent of Robert Kennedy sending federal marshals to enforce civil rights in Mississippi in 1962, they proposed in late 2011 sending federal attorneys to South Dakota tribes to help them enforce the Indian Child Welfare Act. At that time, the Bureau of Indian Affairs announced it was looking into these suggestions, but took no action.

The bureau has been closely following events in South Dakota, said spokeswoman Nedra Darling. “The BIA supports the ongoing tribal efforts to resolve this matter, and we stand ready to participate in future forums,” she said.

Millions at Stake

South Dakota is not the only state that removes Native American children from their families and tribes in disproportionate numbers, but its numbers are among the most skewed, according to the National Indian Child Welfare Association.

The federal dollars South Dakota receives on behalf of all children—Native and non-Native—are considerable. They flow onward to state agencies, foster and adoptive parents, and group homes, as well as to any employees and suppliers. This movement of money has “a measurable effect” on a state’s economy, according to the healthcare consumer group Families USA.

Department of Social Services spokeswoman Kristin Kellar said the agency complies fully with the Indian Child Welfare Act and does not take children to attract federal dollars. Removing a child from the home harms society economically, she said, no matter what “paltry amount of funding the federal government expends to support foster care.” She challenged NPR’s $100-million figure, saying the agency would like to see the numbers on which it is based.

Attorney Daniel Sheehan, general counsel of the Lakota People’s Law Project, an advocacy group, disputed the “paltry” characterization and noted the importance of federal funding to South Dakota. An analysis from the Tax Foundation, a nonpartisan research group, reveals that South Dakota is third in the nation for dependence on the federal government, with 45.6 percent of its total expenditures covered by the federal subsidies.

Sheehan pointed to the state’s 2012 budget, which reveals that Washington’s share of South Dakota social services skews even higher, to about two-thirds of the total—$660 million in federal funding, out of the $1 billion in total state spending on all social services. That means Native foster children, who are more than half of all kids in care in the state, could be responsible for significant portions of several federal funding streams, according to Sheehan.

“They would bring the state chunks of the $30 million in federal money for child protective services; the $67 million for nutrition, health, and other economic assistance; the $37 million for behavioral health; and the $19 million for Department of Social Services administrative costs,” said Sheehan. “We could be looking at substantial federal funding captured by Native children once they are in the custody of a state that relies heavily on it.”

Orders from Above

As the most recent South Dakota child-abuse case unfolded, top state officials appear to have been closely involved. While raiding Schwab’s premises and seizing computers and other items, DCI Agent Black told Schawb that his orders came from the highest echelons of state government.

“The attorney general himself has told me to work on this until I am done with it,” Black can be heard saying in an audiotape he made, which has now been turned over to the courts. “This is my priority case right now. Short of a homicide happening.”

Along the way, Taliaferro lost his job as deputy state’s attorney. Taliaferro’s former boss told local media multiple times that the firing was done “with the support of the attorney general.”

The South Dakota attorney general’s office referred a request for a comment to the Department of Social Services.

The head of that agency was apparently directly involved as well. In a preliminary hearing for Taliaferro and Schwab’s case, the presiding judge interrupted Black’s testimony to ask him a question: “It just popped into my mind. How did you get the kids out of school?” Black responded that the social services department’s director had given permission for deputies to take the children from school so agents could question them.

Kellar said the social services agency “cannot comment on specific abuse and neglect cases, due to confidentiality reasons.”

Schwab and Taliaferro say they fear for their safety. Said Schwab: “Knowing Pierre [South Dakota’s capitol] is calling the shots on this is terrifying. We have no one to turn to.” Their trial is set for January 7, 2013.

State’s attorney Moore is also prosecuting the Taliaferro-Schwab case; he said he could not talk about a pending lawsuit, but that the case against the lawyer and child advocate would be made clear in court next month. In addition, Moore insisted that in the parents’ case, the only abuse charge against them that stuck—the single count of rape—is the one that should have.

Moore conceded that Black and his fellow officers were “unprofessional” during the break in questioning. However, Moore said, they had behaved differently during the questioning itself: “The interviews weren’t in any way consistent with what was on camera. If you’ve been around law enforcement, you know they swear a lot, they make statements they may regret.”

Moore also said that children who are being questioned do not need to be accompanied by an attorney or guardian when they are witnesses, not defendants.

O.J. Semans, a Rosebud Sioux and former chief public defender for the tribe, took a different view. “Ordinarily, children are interviewed alone when there’s an indication that they were victims of a family member who should not know of the interview. If the interview is to determine whether the children provided false statements, which is a crime, they should have representation.”

Semans went on to say, “And, by the way, any law enforcement officer knows the difference between an interrogation, with tough questioning in an intentionally stressful environment, and an interview, which elicits a narrative. Because children can be easily influenced, the latter more accurately reflects a child’s perception of a situation.”

Sara Rabern, spokeswoman for the Department of Criminal Investigation, said the agency could not comment on an ongoing prosecution. Neither the agency nor Black responded to requests for an interview with him; however, Black has testified that he made the recorded statements attributed to him here.

Bad Outcomes Rising

In the first decade of the 21st century, figures from the federal Administration for Children and Families show a fivefold increase in the percentage of Native foster children in South Dakota whom the system failed, the tribal report found. During that period, the percentage of children who were transferred to correctional or mental health facilities, or who died or ran away, soared to 36 percent in 2010 from 6.9 percent in 1999. During the same period, reunifications with family dropped. The percentage of white children leaving under the same circumstances grew much more slowly during those years, from 6.3 percent to 11.4 percent; and the share reunified with their families increased.

“Native American foster children,” the report concluded, “are becoming an increasingly important attractor of federal corrections dollars to South Dakota.”

“Our Native children feed the system. They always have,” said LaMere, a member of the Winnebago Tribe of Nebraska. He added that tribes share responsibility for the exodus of Native children into care. “Many of our tribal leaders have been lax in protecting our greatest resource—our children.”

The tribal child-welfare officials’ report also confirmed that last year almost all Indian children in state foster care were in non-Native homes and white-run group facilities. That’s despite the availability of relatives willing to take the children in and Native foster homes, some of which sit empty on reservations, the directors said.

The Indian Child Welfare Act encourages kinship care, which involves placing children who have been taken from their families with relatives. Tribes favor it, because it preserves the children’s culture and maintains the community. “In our families, there’s always room for one more,” said Terry Yellow Fat, ICWA director for the Standing Rock Sioux Tribe and co-chair of the committee that produced the tribal report.

But tribal members have testified at a 2005 hearing before state lawmakers that social workers for the state routinely rebuffed them when they offered to house young relatives who were being taken into care. One Native American woman asked why she was never considered as a candidate to care for her sister’s children.

Another, whose family had not been allowed to keep a cousin’s children, said the state Department of Social Services, which manages this process, was overwhelming to parents, who generally did not understand the often-changing requirements in child-care plans. A DSS representative at the hearing said that these decisions are made, sometimes quickly, to ensure the safety of the child.

Disappearing into the System

Congress passed Indian Child Welfare Act in 1978 to stop the massive removals of Indian children that had taken place over the preceding century, first to notoriously violent boarding schools, then to foster care and adoption in white homes and group settings. During the mid-20th century, as many as 35 percent of Native children were taken from tribes nationwide under federal-, state- and church-run programs, according to testimony Congress gathered while considering the legislation. Sheehan called this “the intentional disassembling of Native American communities through the seizure of their children.”

In South Dakota, Native children are often taken for “neglect,” according to Yellow Fat. “The prevailing attitude on the part of the state is that poverty is a crime,” he said.

“A federal law is being flouted—and frankly, it’s happening in courts all over our state,” said Diane Garreau, ICWA director for the Cheyenne River Sioux Tribe, in South Dakota, who also worked on the report.

The result can be devastating for parents and children, according to attorney Brett Lee Shelton. “Frequently, the kids have already undergone a lot of trauma. Then, when things they don’t understand happen to them, it only adds to their pain,” said Shelton, a member of the Oglala Sioux, another South Dakota tribe, and principal of the Colorado law firm Smith Shelton Ragona.

When tribal youngsters are being removed, time is of the essence, according to Garreau: “If we are not watching, if we don’t start hustling as soon as we hear there’s a problem, if we don’t fight for every single child, they’re lost to us forever. Can you imagine how frightened they must be?”

LaMere charged that the Indian children’s odyssey through the foster care system as it unfolded in the most recent South Dakota abuse case is not an anomaly.

“As outrageous as it is, it is the sad reality for Native children in South Dakota and around the country,” said LaMere. “That father will walk free long before these Indian kids begin to think about recovery.”

 

Stephanie Woodard is a member of 100Reporters who writes about Native American issues.

Employment Law: The Top 10 Ways Employers Get Sued

From Brett Lee Shelton, Family Business Lawyer™
A recent OPEN Forum post listed the top 10 mistakes employers make that are most likely to get you sued; these include:
1. Classifying all employees as exempt, whether or not they are.
2. Allowing non-exempt employees to work during their lunch breaks.
3. Classifying employees as independent contractors when they are not.
4. Neglecting to provide discrimination and harassment training to supervisors and managers.
5. Allowing employees to determine their own work hours.
6. Firing an employee that takes a leave of absence.
7. Holding an employee’s last check until they return property belonging to the company.
8. Providing employee loans and deducting repayment from each paycheck.
9. Protecting confidential information by using non-compete agreements.
10. Having a “use it or lose it” vacation policy and then failing to pay out to a terminated employee.
Small business owners could be unintentionally violating either federal or state employment laws in an effort to save money, provide employees flexibility or just to be nice. It could come back to bite you, so be sure you consult with your Creative Business Lawyer® on employee rules and regulations for your business.
If you’re a small or mid-size business owner, call us today to schedule your comprehensive LIFT™ (legal, insurance, financial and tax) Foundation Audit. Normally, this session is $1,250, but if you mention this article and we still have room on our calendar this month, we will waive that fee. Call 303-255-3588 to take advantage of this great offer!

Changes in Retirement Benefits for 2013

From Brett Lee Shelton, Family Business Lawyer™
There are several important changes to retirement benefits coming in 2013, including:
Increased limits on IRA and 401(k) contributions. You will be able to contribute another $500 in 2013 to your 401(k) or 403(b) plans when limits increase to $17,500 from $17,000 this year. The IRA contribution limit also increases by $500, to $5,500 in 2013. If you are over the age of 50, your catch-up contribution level remains the same: $1,000 for IRAs and $5,500 for 401(k)s.
Increased Income Limits for Roth IRAs. For singles and heads of households, the earnings limit for contributions to a Roth IRA increase by $2,000 in 2013, to $127,000. For married couples, the increase is $5,000 for earnings between $178,000 and $188,000. Those limits can be bypassed if you convert a traditional IRA to a Roth.
Increased pension insurance limits. The Pension Benefit Guaranty Corp. that insures private pension plans is increasing the maximum guaranteed benefit for retirees over the age of 65 to $57,477 in 2013 from $55,841 in 2012.
Increase in Social Security benefits. Social Security benefits checks will increase by 1.7 percent beginning in January 2013.
Increase in Social Security taxes. Most workers will see a 2 percent hike in their Social Security taxes, as the temporary payroll tax reduction that cut this tax from 6.2 percent to 4.2 percent is set to expire in 2013.
Bigger Medicare Part B premiums. The Medicare Part B premium is set to increase from $99.90 per month to $104.90 in 2013. The Part B deductible will also increase, from $140 to $147.
Saver’s tax credit income limit increase. The modified adjusted gross income (AGI) for workers that participate in a 401(k) or IRA increases by $1,500 to $59,000 for married couples, $29,500 for singles and $44,250 for heads of household in 2013. Those that meet these limits qualify for a saver’s tax credit of $1,000 for individuals and $2,000 for couples.
In addition, the Social Security Administration will halt paper checks on March 1, 2013. Benefit payments will be made via direct deposit into a financial institution account, or applied to a debit card. Retirees who do not opt for the electronic payment option will be automatically enrolled in the debit card program.
If you’d like to learn more about retirement planning, call our office today to schedule a time for us to sit down and talk. We normally charge $750 for a Family Wealth Planning Session™, but because this planning is so important, I’ve made space for the next two people who mention this article to have a complete planning session at no charge. Call 303-255-3588 today and mention this article.

How to Talk to a Loved One About Estate Planning

From Brett Lee Shelton, Family Business Lawyer™
Estate planning rarely comes up in the course of regular conversation and if it does, it is usually involves what has happened to a celebrity’s fortune after his or her death. The distance is safe, so the conversation can take place.
But what if you need to discuss estate planning with a loved one – either your own estate plan or the one they have (or should have)? Because no one likes to talk about the death of someone close to them, we rarely have this critical conversation. But we all should.
So how do you talk to a loved one about estate planning? A recent Forbes.com article provides some good tips:
Pick the right time. If it is too difficult to schedule a time for this conversation, have it when you’re doing something else, like taking a walk.
Start with a story. Use a story as an opener to the conversation, like the death of a celebrity and the havoc that failure to plan is wreaking on his or her estate or how you created your own estate plan.
Talk separately. It may be easier for parents with more than one child to have separate conversations with each child rather than talking to a group.
Use a team approach. If you are having difficulty getting your spouse to focus on estate planning issues, communicate your concerns as a couple. Talk about how aging means making mature decisions and how you need to protect children with estate planning.
Ask for feedback. After discussing your estate plan with your children, ask them individually how they feel about what you have explained. It may not change what you are doing, but it will let them feel they have a voice.
Explain why. Explain to your children the principles that guided your decision about how your estate is being divided. This lessens the chance of conflict among siblings.
If you’d like to learn more about estate planning strategies for your family, call our office today at 303-255-3588 to schedule a time for us to sit down and talk. We normally charge $750 for a Family Wealth Planning Session™, but because this planning is so important, I’ve made space for the next two people who mention this article to have a complete planning session at no charge. Call today and mention this article.

ESOPs: A Solution for Business Owners Teetering on the Fiscal Cliff

From Brett Lee Shelton, Family Business Lawyer™

It has been estimated that business owners have up to 80 percent of their personal net worth tied up in the value of their business, so the pending tax increases have many owners worried about a significant loss of assets to higher capital gains taxes.

One solution to consider is an employee stock ownership plan (ESOP), a qualified retirement plan whose assets are made up of company stock that is held in a tax-exempt trust.  The benefit to business owners is that an ESOP allows you to retain control of the business while allowing you to sell stock and diversify your assets in a tax-advantaged way.

In order to avoid capital gains tax on ESOP stock, the ESOP must own at least 30 percent of the company’s common stock and meet other IRS tax code requirements.  An additional benefit is that the ESOP provides employees with retirement benefits as well.

Even if Congress puts a Band-Aid on the impending tax changes before the end of the year, most experts agree that the capital gains tax will increase.  In addition, there is a new 3.8 percent tax on capital gains for higher income individuals that will kick in Jan. 1, 2013, thanks to the health care reform act.

Beyond federal taxes, some states have high capital gains tax rates that make an ESOP attractive to business owners who operate in those states.  The top 10 states with the highest capital gains taxes include Hawaii, California, Oregon, Vermont, Washington, DC, New Jersey, New York, Maine, Minnesota and Iowa.

If you’re a small or mid-size business owner, call us today at 303-255-3588 to schedule your comprehensive LIFT™ (legal, insurance, financial and tax) Foundation Audit.  Normally, this session is $1,250, but if you mention this article and we still have room on our calendar this month, we will waive that fee.

Time is Running Out to Make Year-End Gifts: Call On Us For Help Today

If you have been taking a “wait-and-see” approach to 2012 gifting (or you have parents or grandparents who may have been doing so), it’s time to call us now. 

 The lifetime gift and generation skipping transfer (GST) tax exemptions are both currently set at $5.12 million, providing a tremendous opportunity to shift current wealth and future appreciation out your estate for estate tax purposes (and to provide your family with significant asset protection for years to come). 

 With both exemptions set to revert back to $1 million on January 1, time is very short on a potential once-in-a-lifetime gifting opportunity that could establish a massive estate tax free and highly asset protected endowment for the people you love.

 We could help you make a gift of highly appreciable property (or already appreciated assets) to a dynasty trust that could last for generations. 

 This shifts the wealth and future appreciation out of your estate and your children’s estate and even the estate’s of many successive generations, thereby incentivizing your children and all future generations to grow these assets even more.

 You may want to make a gift of a second home or vacation property or fractional interests of those properties to a dynasty trust, ensuring it stays in the family for generations.

 Or you may have assets that are not being used optimally at the moment that could be doing far more for your loved ones if they were transferred now and in such a way that your loved ones were incentivized to optimize these assets, learn from them, and create a true lasting legacy for all the people you love.

 If you would like our support with any of this, please contact us right away because as I said time is getting very short now and we will need to squeeze you in this week to get the process started.

 Our philosophy is that all gifts made, whether outright or into a dynasty trust for generations, should include not just the money you are gifting, but also the wisdom to ensure the people you love make the very most of what you are gifting to them.  And we will definitely help you with that as well.

 So call our office at 303-255-3588 today and schedule your time with me if you would like to use this once in a lifetime opportunity to transfer as much as possible to your loved ones free of estate tax and fully protected from creditors, bankruptcy, divorce and predators while providing the wisdom, knowledge and incentive to grow what you gift for generations to come.

 Yours in service,

 Brett Lee Shelton 

Your Personal Family Lawyer™

Smith, Shelton, Ragona & Salazar

3 Tax Saving Actions To Take Before 2013!

From Brett Lee Shelton, Family Business Lawyer

It’s safe to say that all of us would like to save money on our taxes. The problem is, most of us don’t know how or we procrastinate too long to take advantage of tax saving strategies that can make a big difference on the bottom line.

 If you’re ready to save money – be ready to act now. You can literally save thousands on your taxes by implementing these three simple actions in the next two weeks.

 1.   Meet with your tax advisor now — in the new year or even after the holidays is too late.

 Be prepared to provide year-to-date income and expenses PLUS projections for both through the end of the year. Make this appointment now so there is still time to strategize.

 2.   Open the right kind of retirement account and/or a Health Savings Account (HSA).

 While you don’t need to fund it now, you do need to open it before the end of the year if you want to be able to fund it with tax-free income that will impact this year’s taxes.

 Talk to your tax advisor to find out what kind of retirement account is right for you. If you qualify for a Health Savings Account, get that open now, even if you don’t fund it immediately.

 3.   Live like an entrepreneur.

 Consider how to maximize your deductions this year or whether to push some off into next year (if next year will be a bigger tax year) and do things like:

 ●      Hire your kids — Shelter up to $5,950 by hiring your kids in your business and they don’t pay taxes on that income.

 ●      Hire a coach — Bonus your team and/or have an end of the year party for your clients to get your income down this year for tax purposes while building long-term value that will result in increased income down the road.

 ●      Transform out-of-pocket expenses into deductible business expenses — Structure them wisely, such as getting yourself booked to speak in the next place you want to take a vacation.

 As a Creative Business LawyerTM, I meet with my clients and their tax advisor at year-end to strategize based on the overall picture. If you would like this kind of support, call 303-255-3588 and schedule an appointment to discuss your options today.

The Pros and Cons of Sole Proprietorships, LLCs and Corporations

From Family Business Lawyer™ Brett Lee Shelton

Starting your own business?  One of the first things you will need to do is to decide what type of business entity is best for you.  There are pros and cons to each and it is advisable to consult with a Creative Business Lawyer™ before you make your decision:

Sole Proprietorship – nearly three-quarters of all American businesses are run as a sole proprietorship; here are the pros and cons:

Pros:  Easy to start, owner keeps all profits, business income is taxed as personal income, business can be disbanded easily.

Cons:  Owner is liable for all business debts and therefore personal assets are vulnerable to creditors, can be difficult to raise investment capital, business does not survive the owner.

Limited Liability Companies (LLCs) – owners become “members” of this legal entity, which offers the taxation benefits of a sole proprietorship with the limited liability protection of a corporation.

Pros:  Owners are protected from personal liability for business debts and legal claims against the business, business income is taxed as personal income, flexibility of ownership.

Cons:  LLCs are not recognized in every state, owners not obligated to consult with other owners for certain business transactions.

Corporation – a corporation is an entity that is entirely separate from its ownership, with its own legal rights.

Pros:  Owners are protected from personal liability for business debts and legal claims against the business, shares of stock can be sold to raise capital, easy to transfer ownership, can outlive original owners.

Cons:  Owners must pay taxes twice – on the corporation’s income and the income earned personally from the corporation, must pay capital stock tax, complex regulatory environment.

If you’re a small or mid-size business owner, call us at 303-255-3588 today to schedule your comprehensive LIFT™ (legal, insurance, financial and tax) Foundation Audit.  Normally, this session is $1,250, but if you mention this article and we still have room on our calendar this month, we will waive half of that fee.