Selection of a beneficiary: who, what, when

Now that you have chosen the estate planning instrument (will or trust) that you will use and that you have chosen your trustee or personal representative, who do you want to leave your assets to? What good do you want to leave to each beneficiary? When should each beneficiary receive your property? The answers to these questions may seem easy – leave everything in equal parts for your children and let them understand the details. However, these questions require further analysis to ensure that your property is passed on to whoever you want, when and under what conditions you wish to pass it to each beneficiary.

  • Who receives your property?

Initially, it is easy to answer this question: my children will receive all my belongings. It&39;s easy. But what if one of your children dies before you? Does this child have children? What about this child&39;s spouse? Do you want the spouse to receive something?

What happens if, after executing your will or your trust, one of your children becomes disabled and receives government benefits? Do you want this child to receive his share of your estate, making him ineligible for government benefits?

Do you want to write one of your children out of your will or trust? Would it be better to leave something to this child while limiting his access to what you leave him?

A will or relationship of trust may be written to include answers to these questions, but these require the client to provide a thoughtful contribution.

Rather than ask who you want to receive your property from, I will sometimes ask who you do not want to receive your property from. If you do not want your son-in-law to lose his slippery fingers on your inheritance to his gambling habits, you will probably have to put your daughter&39;s share in your estate. in a kind of underconfidence for her and the benefit of your grandchildren.

  • What property does each beneficiary receive?

A common probate dispute concerns the recipient who gets what. This is not always a simple fight for worthless trinkets (although this is very common), it can also be a fight on many plots of real estate. A recent dispute that we dealt with concerned an estate consisting of the deceased&39;s house and a few parcels of commercial buildings. The will provided that all children receive equal shares of the estate.

Not all children heard and the idea of ​​making these children own their belongings together seemed impossible. A fight broke out over the distribution of the estate. A child did not want to be in business with his siblings or co-own many properties.

The deceased had a simple will in a situation where she needed something more complex that identified the specific property that each child should have received or who was distributing the property to a trust that would be managed by a professional trustee. A specific language indicating who would receive what specific property or what would happen to the entire property if the children were not agreed on the distribution would probably have saved everyone money. substantial legal fees.

  • When does the beneficiary receive the property?

The timing of a distribution can be extremely important. Do you want a beneficiary to receive the share of your estate from it immediately after your death, or even years later, if applicable? Many beneficiaries benefit from inheritance in a trust throughout their lives.

If a beneficiary is disabled, you will probably want to leave his or her share of your estate in a trust for extra needs (sometimes called a special needs trust) in which the beneficiary never receives his or her inheritance. Rather, he was placed in trust all his life.

If you have younger children, you probably will not want them to receive their share of your estate until they reach a certain age, such as 25, 30, 35 or 40 years. However, without proper planning, Oregon says that a child 18 years old, they can receive their share of your estate after reaching the age of 18 (except in limited circumstances). Most people do not like this result and include trust in minor children in their will or confidence to prevent this from happening. Using a trust for minors, a trustee (whom you name in your will or trust) will manage the assets of the trust for the benefit of the child and may use them to pay for health care, education, housing, etc. When the child reaches the age indicated, he receives all that remains to him.

In addition, you can leave something to a recipient who has spending problems, bets or excessive consumption, but you do not want that individual beneficiary to ever have control over the property you leave him. You can use a trust established for the life of the beneficiary, in which the trustee of the trust has absolute power over the distribution of the assets of the trust. The use of a trust saves you from having to disinherit a troubled child, but also allows you to keep some control over how it uses your property after your death.

You may also have a child who is a doctor, lawyer or other profession where potential malpractice or negligence claims could erase that child&39;s estate. By leaving your child&39;s estate in a trust for the benefit of the child and the benefit of his family (with an independent trustee), you may be able to prevent his creditors from receiving his inheritance.

  • Conclusion

Just as in deciding whether you want to use a will or trust and appoint your trustee or personal representative, the choice of your beneficiaries should be a thoughtful answer. There is no single answer and what works for one client may not work for another because families are unique.

© 20/02/2014 Kevin J. Tillson of Hunt & Associates, PC All rights reserved.

2019 in real estate: the probabilities

After decades of involvement in financial planning and more than 10 years as a licensed real estate salesman in the state of New York, I think it&39;s worth looking more closely at the current trends and future possibilities (factors likely to have an impact), and how, with caution, be able to offer the best possible prospects, etc. Let&39;s start by clarifying, there is no crystal ball. real estate, and, in addition, any financial matter. At the same time, however, having a historical perspective, understanding how certain problems, etc., could affect the market, etc., are important and relevant issues. With this in mind, this article will attempt to briefly review, examine, review and discuss some of the factors that may affect the real estate market.

1. Factors Influencing Interest Rates: When interest rates rise, mortgage rates follow. The higher this rate, the more it costs, monthly, to own a home. Do not forget that the vast majority of homeowners enjoy a mortgage to buy their home. A slight increase may result in a monthly expense and, as a result, some people may not qualify for the loan, for this reason. In addition, many people consider their monthly budget and their personal comfort zone so that any significant increase can reduce the number of qualified potential buyers. The overall impact of this can be, transform a seller market, to a buyer or a neutral market. This often creates price adjustments and savvy consumers do what they can to keep themselves and prepare themselves. What will 2019 show in terms of interest rates? Nobody knows for sure, but the best guess would be a slight gradual increase, unless an important factor occurs.

2 Trust: When people have more confidence in the future, housing usually benefits. We often see it in stock market fluctuations, but this also happens in real estate. With a low employment rate, we have seen good markets in recent years, but how could this partial government shutdown take into account market potential and remain strong? We need to look closely at the possible factors involved, including: political uncertainty; dangers of the world; economic growth / slowdown, etc. Most of the factors seem to indicate both positive and negative factors, so proceed with wisdom.

3 Competition: Until the fourth quarter of 2018, the last two years had been marked by a sellers&39; market, in which many houses were selling quickly and at a price higher than the listing price. The fourth quarter showed a slight cooling and a little more normalcy. However, we also saw a slight increase in the number of listed homes and, as a result, a slight increase in inventories.

4 Price: Although uncertain, most factors point to more stable pricing, rather than the rapid rise we have seen in recent years. Most experts claim a slight increase from one year to the next, but beware, many factors can play.

5 Inflation: If we have a higher inflation rate, house prices will go up. Most only call for moderate inflation.

Do not ignore other factors, such as uncertain political issues, global crises, climate, etc., as they affect housing and the market. Beware, get ready and go on, eyes wide open.

The many responsibilities included in the key roles of a lawyer specializing in estate settlement

Estate settlement and estate planning are important elements in planning for the future and for the safety of loved ones and loved ones. These are part of the last wills of a will. And in the preparation of all these elements, the role of a specialist attorney in probate, who is usually an expert in the execution of the last testament of a person according to his wishes. To facilitate the administration of the estate, it is important to record and write legal documents to the court. To do this, executors have complete independence to engage expert lawyers in these documentation processes. There are usually two types of probate lawyers: probation litigants or transactional litigants. It is usually the transaction lawyers who manage the estate-related tasks. On the other hand, where the heirs dispute the will or there are family conflicts, the litigators in charge of probate are responsible for examining the question and seeking an acceptable solution.

Specialized lawyers in transactions are solicited when it is necessary to submit the death certificate and the last will. If there is no will and there is confusion as to the last wishes of the deceased, the lawyers specializing in the settlement of estates are generally required to assist the lawyers in charge of transactions to assist in the settlement of estates. There are common inheritance taxes, such as obtaining affidavits for real estate transfers; sending notification letters to creditors; filing final tax returns and writing "transfer consent" forms for the financial accounts. If and when the heirs dispute the will or if there are lawsuits about it, litigators are engaged to defend the estate during the probate process. When it comes to asset allocation or property and mediation of disputes or disputes that may arise in the process, litigators in charge of probate may 39; prove helpful in resolving everything amicably. There are even inheritance lawyers who have the skills and qualifications to deal with both litigation and transactional matters. But it is always wise to consult at least three or more lawyers when a person is thinking about using a lawyer. There is no point in hiring the first to come if, at the end of the day, he is not able to do the job that best suits the interests of the estate.

When a loved one expires, the whole family goes into mourning and it&39;s a hard time for them. Thinking about estate planning and settling an estate becomes a torture when you are mourning. Therefore, it is wise to seek the help of the estate attorney who participated in the execution of the deceased soul&39;s will. But it is also important that the lawyer in estate settlement has the attitude and personality necessary for the proper administration of the estate. This is a delicate issue. The lawyer must therefore be compassionate and understand the dimensions of family relationships so that the process is managed with compassion and gentleness, otherwise the whole settlement process would become a painful experience. By adopting estate planning strategies prior to death, individuals can avoid probate and any resulting conflicts when there is no will. This is a complex issue, it is the least that can be said when it comes to transferring ownership of assets and properties. Therefore, all documentation must be properly set up, so that there are no gaps during their filing in court. of the law. Therefore, when appointing a lawyer, many factors must be taken into account and only the right lawyer should be employed to do justice to their roles.

Tips on real estate in Mumbai

Are you planning to invest in real estate in Mumbai? Mumbai is a commercial center and a preferred destination for Indian companies. Recent reports highlight the fact that the disproportionate and unreasonable prices of financial capital are almost beyond the reach of the common man.

Mumbai has always been the favorite of most companies to have their headquarters in the city. The property prices in Mumbai owe much of its credit to large-scale investments in the commercial sector. And with the increasing investments of multinational companies in the information technology, IT and OPL sectors, demand for office space has increased. Experts say the development of infrastructure such as buoys, airlifts, highways and shopping centers in India has been the main reason for rising prices, which has therefore created an imbalance between supply and demand for residential properties. The rental values ​​in Mumbai also have top corresponding to those of other metros.

However, here are some tips for insiders.

Tips for Buying Property in Mumbai

Budget and Limits: In this costly day, you must try to analyze the best budget you can afford. In this budget, you can inquire about available properties. Decided on 1 bhk, 2 bhk, 3 bhk or villa, and further see which areas have properties in the budget and the appropriate category for you.

Research: The advantage of the Internet lies in the information it provides you at your fingertips. Once decided on the location, visit the property sites and find the real estate prices in the selected locations. These real estate prices can be a little inflated or deflated. However, it will provide you with a beach in which you may be able to become your type of property.

Try the owner&39;s properties: owners who have registered their properties on a real estate site will have their property immediately available. In addition, saving on commission can save you a lot of money that you could invest in providing a letter. It is easy to refine the search for properties on these sites and find a good deal.

Hiring a real estate agent: Property dealers reach the corner and corner of the zones. They can spot properties that could never have fallen on the property&39;s site. Hire a real estate agent if you are buying your first home in Mumbai. Since it&39;s your first home, do not get on the job with all the transactions and information to check before you buy a property. The help of a professional by investing in real estate in Mumbai will allow you to avoid any fraudulent transaction and make an informed choice.

Look closely at the properties: now is the time to consider the properties you may have preselected. Consult at least 5 to 10 people and in various areas before choosing the house that suits you best. You can be particularly attentive to window facades, to Vaastu, etc. It may be useful to note the specifics you expect from a home and make sure that your choice meets all the criteria. Imagine what the house would look like once furnished. What coolours would you like your rooms in etc … and then go ahead and select. But here&39;s until you read the next point

Consider the following criteria before you finally decide on the property. Calculate your daily expenses: Sometimes you have to be willing to compromise while investing in real estate in this situation and in the distances. The house could be perfect with the number of rooms you want. But would you buy it anyway if it took you hours to go to town?

o schools around the area. It is essential that your child&39;s school is close to your home. Keeping this in mind basically solves two problems: since he / she is going to be in the same school for about 12-15 years, it may not make sense if your child has to spend time in school. daily travel problem for him too as providing security.

o Opt for higher floors as this will prevent dust. You can also enjoy all the weather conditions in India, be it winter, rains or spring.

o Some basic needs are hospitals, grocery stores, markets, bus depots and train stations. These amenities ensure a hassle free daily life.

o The next thing concerns the security of this area. Do enough research in the neighborhood and buy preferably a house in closed and supervised residential areas

o You should be ready to travel for work. However, do not compromise on the areas mentioned above. A job is a dynamic factor and you can change every year. However, if traveling is a chore for you, it may be better to continue investing in a property and renting and renting it in rented accommodation.

o You should also look for amenities such as a pool, a sports club, a gym, etc. in the residential complex or nearby. All of these facilities will help your family relax and cool off.

Price research: the "asking price" can be much more than the actual price. Therefore, it will be very helpful to know the selling prices of the latest real estate sales in the area you are interested in. There may be marginal differences on the basis of various factors, including the Vaastu economy of the place, the floor of the apartment, water, furniture, etc.

You should also understand future evaluations, if you are considering buying a house and if you have enough money to buy it in the city center, understand that you may not get a great deal of satisfaction. If you are looking at home, in addition to enjoying the real estate boom, buy a house in the suburbs.

So with these tips in mind, go ahead and jump into the world of real estate!

The Oregon Certification Process: How to Start

In my estate planning firm and in my estate administration, I am asked the same questions: "What is probate?" and "Why should it take so long?"

Usually when people tell me that they want to avoid probate, they mean that they do not want their estate to be administered through a judicial process, whether the person has a will or not. The exact definition of approval is not so important. In essence, the administration of an estate (if a will is provided for) or a succession without a will (if there is no will) is the legal process for collecting the property of a deceased individual; repay the creditors of the deceased; and pass on the remaining assets to the person&39;s heirs (if there is no will), to his beneficiaries or beneficiaries (if there is a will).

The process more appropriately calls estate administration, but as people tend to view these two processes as an audit, I will continue to use this term throughout this post. The approval process generally includes three periods: (1) start; (2) administration; and, (3) the closure. This article will discuss the beginning and the events leading to the beginning.

1. What assets make up my probate estate?

Before discussing the beginning, it is important to understand what constitutes a probate sequence. Any property belonging to the deceased on the date of death that will not be automatically transferred to a named person will be included in your probate estate. For example, a bank account with a death beneficiary will automatically pass to the designated beneficiary, without probate. In addition, the property belonging to a trust created by the deceased will not be part of the deceased&39;s probationary estate, since the deceased did not technically possess the property at the time of his death.

Common probate assets include real estate, stocks and bonds, vehicles, bank and brokerage accounts, and various personal property.

Retirement accounts and life insurance are generally not subject to probate since they usually have named beneficiaries. However, if a beneficiary is not designated or dies before the owner / insured, the estate of the owner / insured is usually the default beneficiary.

2. Is full registration necessary?

A complete probate procedure may be useless if: you have a fairly small estate upon your death; you only have assets with a death designation or are jointly owned with survivor&39;s rights; or you have transferred your property to a trust.

In Oregon, where a deceased&39;s estate consists of real estate valued at less than $ 200,000.00 and personal property valued at less than $ 75,000.00, a small estate proceeding may be used to transfer the property of this deceased to his heirs or beneficiaries, if he has will. The process is relatively easy and much less expensive and takes a lot of time than a full registration. A lawyer is probably needed to ensure compliance with the various laws. People often ask me, "Can I use an affidavit in a small estate if my father&39;s house has a value of $ 300,000.00, but a loan of $ 150,000 hurts him? The answer is no, because the limits are based on raw values ​​and not on net values. Since the gross value of real estate exceeds $ 200,000.00, probate is required.

Husbands and wives often own their home, bank account and other property as "spouses". Thus, when the first spouse dies, the surviving spouse will be the sole owner of the property. No approval is necessary. When the wife dies, probate will probably be required to transfer the property to her children or other named beneficiaries.

As another example, suppose that after the death of the wife, the wife has transferred her home into a revocable living trust. She maintained a brokerage account with $ 78,000.00 in her name with her children as beneficiaries to pay at death. She also had a savings account of $ 5,000.00 that she had forgotten and that she had never transferred to her trust, but that account had no savings. beneficiary at death.

When she dies, can her children use the small estates process? The answer is yes. Although his entire estate consists of personal property over $ 75,000, the amount subject to probate is well below this threshold because the brokerage account is transferred directly to the named beneficiaries. and that his house belongs to his trust.

Small estate procedures should be used to transfer the savings account to the wife&39;s heirs, but a full audit will be avoided.

3. Approval is required. And then?

Suppose the woman has a will and her daughter is named personal representative. She will administer the estate of her mother. Her father died a few years ago and the daughter has two brothers.

At this point, she may have a vague understanding of her mother&39;s estate and searched for a will, trust and other estate planning documents. If she is lucky, her mother follows the advice of her lawyer and places the original documents in a safe or safe.

Since probate is a complicated and confusing process, her daughter will need a lawyer to help her navigate the waters of probate. She can use any lawyer with whom she feels comfortable.

During her initial appointment with her lawyer, she will bring the will, the death certificate of her mother, various documents identifying the property of her mother, as well as her brothers and sisters. Contact information. She can also provide information about the creditors of her mother&39;s estate (credit card companies, unpaid medical providers, etc.). On the basis of the information provided, the prosecutor will draft an application for probate or a request for administration of an intestate heritage, depending on whether or not there is a will.

As a general rule, the person designated as the personal representative in the will asks the court to manage the estate. What happens if the will does not exist or if the personal representative does not want to serve and there is no appointed successor? The court gives preference to a surviving spouse and then to a child or next of kin.

If there is no surviving spouse and no next of kin, then if the state provides public assistance to the deceased, the director of social services or the director of Oregon Health Authority may appoint a lawyer to the position of personal representative of the deceased. There is no surviving spouse or next of kin. The Department of Veterans Affairs is the following. followed by any other person. These are just statutory preferences. The individual must still be qualified as a personal representative.

4. The petition is filed, what happens next?

The motion is essentially a request to the court to admit the will filed with the probate application and to designate the person named in the application as a personal representative. Notice of the filing of the petition shall be given to various governments, to the heirs of the deceased, to the beneficiaries named in the will and to other interested persons. These individuals will have the opportunity to oppose the appointment of their personal representative and to seek further pleas from the attorney representing the personal representative.

In the future, I will discuss what will happen once the application is filed and the first steps associated with the administration of Oregon Estates.

© 3/18/2014 Kevin J. Tillson of Hunt & Associates, PC All rights reserved.

*** This article is informational only and the circumstances surrounding your case or legal matter are unique. This article does not constitute legal advice and should not be invoked without consulting a licensed legal professional. ***

4 trappers real estate investors fall for

With the real estate sector booming, the main investors in the street are getting into the fray. Unfortunately, too many of them are poorly equipped, uneducated and fall over and over again in the same traps. Here are 4 common mistakes that real estate investors make. By becoming aware of these common pitfalls, you can navigate the new real estate boom knowingly and watch your wallet fly away.

Trap 1 real estate investor – Buy a property for the wrong reason

When we really come to the point, there are only 3 ways to make money by investing in real estate.

1. Rental income exceeds your expenses and generates a positive cash flow for you each month (cash flow).

2. Tenants will repay your mortgage (growth of equity).

3. The property is about to gain value with time (surplus value).

The ideal property is one that is very ready to offer all three. Unfortunately, far too many investors buy with only the third reason (appreciation). With inflation in mind, history has shown us repeatedly that this is a very high-risk game because it is speculation and not investment. Unless you are happy playing or speculating, or if you know how to create value by redeveloping, renovating or reallocating the use of a property, you should never buy to be appreciated.

Focus on looking for buildings that generate enough rent to cover monthly mortgage payments, taxes, insurance, maintenance and building management and, ideally, leave a little on the account.

If you are able to systematically focus on this formula, you will find that you are much less vulnerable to market volatility and you will not spend the benefits of your good investments to cover the losses of your bad speculations every month. .

Trap of the Real Estate Investor 2 – Chasing Deals

Just like a bloodhound, most investors leave very targeted with a clearly defined destination in mind … until they see a squirrel.

Suddenly, all the attention is directed to the squirrel and this one no longer worries about his plan.

This is what seems to happen to a lot of investors. Either they do not have an investment plan to follow, so they are always looking for squirrels or they allow themselves to be easily distracted from this plan when a new squirrel appears.

If you stick to a well-thought-out plan, based on the fundamentals of real estate investing (buying for cash in areas with good economic fundamentals), instead of looking for the last destination, you can earn more money, make less effort and minimize the risks of your investments dramatically.

Real Estate Investor Trap 3 – Do not weigh the risks and benefits

All I&39;ve heard from someone, is their return on investment. Although there is no doubt that it is a critical variable; Nobody ever seems to consider their return on time. Time is money, so it is imperative that you value performance as well as performance. These two elements constitute your return on investment.

This is an important number to consider, but this is not the first thought I have when I evaluate an investment. Instead, I ask:

– What is my return on my time?

– So, what are my returns relative to my risks?

Time is your most precious resource. You can not create more time. You can create more money. The money for investment is unlimited when you know how to raise it. And making money is not so difficult – it&39;s hard to keep it. That&39;s why your greatest consideration in a transaction is the time you have to invest and the risks you must assume to get the return.

When we focused solely on the return on investment, we had to deal with a lot of risks, which took a lot of time for management and maintenance. However, we have not balanced risks and returns. The cash was huge – so the opportunities seemed big.

Unfortunately, high-yield contracts tend to take a ton of your time and energy to manage all the risks. And if something goes wrong, you will soon find that your funds are exhausting too.

Many real estate investors do not think well of the risks and benefits before signing a new investment agreement and end up being unable (or reluctant!) To expand their portfolio due to a property problem or both .

Real Estate Investor Trap 4 – Trying to do it alone

As a new real estate investor, it is tempting to look for interesting offers. Like a dog distracted by a squirrel, you can find yourself in a totally opposite direction to where you were going when you started. Real estate investing should not be exciting . If this is the case, you are probably wrong or you are taking huge risks that would deserve to be huge, with huge benefits.

Personally, I would hire a real estate investment coach to help me with this part. Since we work with good coaches, we work less and earn more. You can save time, stress and money by recruiting the right experts on your team. But no matter who you work with, you should get help for this part. Sit down with your coach, an experienced investor or at least someone specializing in helping real estate investors in financing their operations, to develop your master investment plan. Then run this plan with your accountant and even your lawyer. Get feedback from key members of the team. Next, stick to this plan with a focus on minimizing time and risk investments and maximizing monthly cash flows and future potential.

A good option to consider is to join an association. There are local and national groups and associations that meet and exchange ideas, news, knowledge and support on a regular basis. Associations are full of coaches, mentors, and tools that can dramatically reduce your learning curve.

The boom years of the 2000s are behind us for the moment. However, the bust years are too. The new boom is starting now and experienced investors are gearing up for huge returns.

If you avoid these four mistakes when creating your portfolio, you will get closer to your goals much faster and easier!

Colorado Country Realty – Redefined Real Estate

Colorado Real Estate – Find the Best Deals Online

The beautiful setting of Colorado offers many benefits to those considering buying properties in the area. Its capital, Denver, offers all the equipment and places ideal for biking, hiking and other fun outdoor activities. There are many top notch properties in Colorado, such as Highlands Ranch Real Estate, Parker Real Estate, Littleton Real Estate, Castle Rock Real Estate, Pinery Real Estate and Aurora Real Estate. Colorado may be a nature lover&39;s paradise, but even those who are out in the open will appreciate the many recreational opportunities Colorado has to offer.

The days in Colorado are characterized by sunny skies while the evenings are cool and refreshing. There is plenty to do in Colorado even at night thanks to Denver&39;s vibrant nightlife. The city of Denver is home to many bars, nightclubs, restaurants, cafes and even casinos that will delight the most jaded nocturnal creatures.

Colorado is also a family-friendly place with many shopping centers, café terraces and child-friendly entertainment facilities. Colorado is a curious mixture of old and new, where modern commercial establishments can be seen alongside museums and old buildings. Colorado is also known for its festivals and other cultural activities and, of course, for its friendly people.

Colorado is one of the few places in the United States to experience a housing boom. The new residential and commercial structures under construction in the area testify to the lively and exciting real estate atmosphere of the place. Modern facilities, excellent recreation centers, well-established institutions, business opportunities, low crime rates and welcoming residents are some of the factors that have contributed to the real estate boom.

But of course, one of Colorado&39;s major attractions is the Rocky Mountains with its many ski resorts. The Rockies have made Colorado a hot spot and a favorite spot for family vacation homes.

One of the things that surprises most people is that properties in Colorado are really affordable. To get the best deal if you are considering buying real estate in Colorado, ask a real estate broker for advice. Look for a real estate agent in Denver, a real estate agent in Highland Ranch or a real estate agent in Parker is now easy through the internet. A reliable real estate group that you can find online is Colorado Country Real Estate and you can visit. Whether you&39;re buying a house or planning to sell it, Colorado Country can help you with all your real estate needs.

10 most expensive tax mistakes costing real estate agents thousands

Are you satisfied with the amount of taxes you pay? Are you confident that you will benefit from every available tax break? Most importantly, does your tax preparer proactively advise you? save on your taxes?

The bad news is that you probably have make pay too much tax and you are probably do not take advantage of every tax break. And most preparers do a mediocre job of saving money to their clients.

The good news is that you do not have to feel this. You just need a better plan. This article reveals some of the biggest tax mistakes made by business owners. Then he gives brief solutions for actually solve these problems. Please note that this article is designed to be an information tool only. Before implementing any of these strategies, you should consult a tax professional for specific guidelines and requirements.


The first mistake is the most serious of all. He fails to plan. No matter how good your tax preparers are with your receipt stack on April 15th. If you did not know that you could deduct your kids&39; pins from professional fees, it is too late to do anything when your taxes are prepared the following year.

Tax coaching is about giving you a plan to minimize your taxes. What should you do? When should you do it? How should you do it?

And tax coaching offers two more powerful benefits. First of all, this is the key to your financial defenses. As a real estate agent, you have two ways to put more money in your pockets. The financial offense increases your income. Financial defense reduces your expenses. For most agents, taxes are their main expense. So it makes sense to focus your financial defense where you spend the most.

And secondly, tax coaching guarantees results. You can spend all kinds of time, effort and money promoting your business. But that can not guarantee results. You can also set up a medical expense reimbursement plan, deduct your daughter&39;s corsets and guarantee tax savings.


The second big mistake is almost as important as the first, and it is rather feared than to respect the IRS.

What kind of tax planning we are talking about affects your chances of being verified? The truth is that most experts say it pays to be aggressive. Indeed, the overall verification probabilities are so low that most legitimate inferences are not likely to trigger "alarm signals".

Verification rates are actually as low as they were in 2008 – the overall verification rate was only one in 99 returns. About half of these audits were for the working income tax credit for low-income working families. The IRS targets primarily small businesses, especially individual businesses, as well as cash industries, such as pizzerias and coin launderers, offering the ability to hide incomes and save money. profits.


If you are like most business owners, you pay as much for tax on self-employment as for income tax. If this is the case, you might consider creating an "S" corporation or a limited liability company to reduce this tax.

If you operate your business as a sole proprietor, you will report your net income on Schedule C. You will have to pay tax at your personal rate. But you will also pay a 15.3% tax on your first net income of $ 106,800 and 2.9% of anything greater than 2010.

Say your profit at the end of the year is $ 60,000. You will pay income tax at your usual tax rate, based on your total taxable income. But you will also have to pay about $ 9,200 in self-employment taxes. This tax replaces the social security and health insurance tax that your employer would pay and withhold if you were not independent.

An "S" corporation is a special corporation that is taxed as a partnership. The company pays homeowners a reasonable salary for the work they do. If there are any profits, these are passed on to the shareholders, who pay the tax on their own statement. Company "S" splits the owner&39;s income into two parts: wages and transitional distributions.

"S" companies are so attractive because even if you pay the same 15.3% of your salary as you would on your self-employment income, there are no Social security or tax on self-employment due on the transmission of the dividend. Suppose your company S earns the same $ 60,000 as your sole proprietorship. If you pay yourself $ 30,000 in salary, you will have to pay about $ 4,600 in social security taxes. But you will totally avoid the $ 4,600 self-employment tax with the $ 30,000 deferred distribution.

The company "S" requires a little more paperwork than the property. And you must pay a reasonable salary for your services. This means that you will pay for an outside employee to do the same job. But the IRS is looking for agents who believe that all their income is passed on. The reasonable salary of agents varies depending on the time spent on real estate activities and your location.


If you want to save more than the current limit of $ 5,000 (over $ 1,000 for taxpayers age 50 and over) for ARIs, you have three choices: Simplified Employee Pensions (SIP), SIMPLE IRA or 401ks. Generally, if you have a company pension plan, it must be available to all your employees and the contribution calculations must be applied in the same way as for you or any employee of the family. .

SEP and SIMPLE IRA are the simplest plans to configure and administer. There is no annual administration or paperwork required. Contributions are paid directly into the retirement accounts of employees. For MS plans, self-employed people can contribute up to 25% of your "net income from self-employment", up to a maximum of 49,000 USD for 2010. For SIMPLE IRA, the maximum contribution for 2010 is USD 11,500 (50 years or more can contribute USD 2,500 additional catch-up.) Simple ARIs may be better suited for part-time or marginal businesses earning less than USD 40,000. You can also hire your spouse and children, who can make SEP or SIMPLE contributions.

For even higher retirement contributions, not limited to 25% of your self-employment income, consider a 401 (k) retirement plan. You can even configure what you call a "solo" or "individual" 401 (k) just for yourself. The 401 (k) is a true "qualified" plan. And the 401 (k) allows you to contribute a lot more money, with much more flexibility, whether it&39;s the SEP or SIMPLE. For 2009, you and your employees can "defer" 100% of your income up to $ 16,500. If you are 50 or older, you can contribute an additional $ 5,500 "catch up". You can also choose to match the contributions of your employees or pay profit-sharing contributions of up to 25% of their salary. This is the same percentage that you can save in your SEP, in addition to the deferral of $ 16,500 or $ 22,000, for a total contribution of up to $ 49,000 per person in 2010. The 401 (k) are usually more difficult to administer. There are anti-discrimination rules to prevent you from completing your own account while you stiffen your employees. Like the SEP and SIMPLE IRA, you can still hire your spouse and contribute to his account.

If you are older and would like to contribute more than the $ 49,000 limit for PSS or 401 (k), consider a traditional defined benefit pension plan in which you can contribute to ensure a maximum annual income of 195 000 USD. Defined benefit plans required annual contributions. But you can combine a defined benefit plan with a 401 (k) or SEP plan to give you a little more flexibility.


Engaging your children and grandchildren can be a great way to reduce taxes on your income by transferring it to someone who pays less.

  • The IRS has maintained deductions for children as early as the age of 7.
  • Their first earned income of $ 5,700 in 2010 is taxed at zero for the child. This is due to the standard deduction applicable to a single taxpayer, even if you report it as a dependent. Their next $ 8,375 is taxed at only 10%. So you can move some income downstream.
  • You must pay them a "reasonable" salary for the service rendered. This is what you would pay to a commercial salesperson for the same service, with an adjustment made based on the age and experience of the child. So, if your 12-year-old son is cutting grass from your rental properties, pay for it at a landscaping service. If your 15-year-old daughter helps you keep your books, pay her a little less than a bookkeeping service can entail.
  • To check your return, be sure to write a job description and keep a timesheet.
  • Pay by check to be able to document the payment.
  • You must deposit the check into an account in the name of the child. But the account can be a ROTH IRA, Section 529 Education Savings Account or a custody account that you control until they are 21 years old.
  • If your business is not incorporated, you do not have to withhold social security until you reach the age of 18. So it&39;s really tax free money. You will have to give them a W-2 at the end of the year. But this is painless compared to the tax you will lose if you do not take advantage of this strategy.


Surveys used to show that the taxes were the main concern of small business owners. But now, health care costs are skyrocketing. If you are a self-employed worker and you pay for your own health insurance, you can deduct this amount as an adjustment to the income shown on page 1 of Form 1040. If you enter the deductions in detail, you can deduct medical and dental expenses. unreimbursed total of more than 7.5% of your adjusted gross income. But most of us do not spend a lot.

But there is a way to crush all your medical bills as professional expenses. This is what is known as a Medical Expense Reimbursement Plan (MERP) or plan under section 105. This is a medical plan. employee benefits, which means that an employee is needed. If you operate your business as a sole proprietorship, partnership, limited liability partnership or corporation S, you are considered a self-employed person and you are not eligible. But if you are married, you can hire your wife. If you are not married, you can do it with a C company. But you do not have to be incorporated. You can do it as a sole proprietorship or LLC by hiring your spouse.

The only exception is Company S. If you own more than 2% of the shares, you and your spouse are considered self-employed for the purposes of this rule. You will have to use another source of income, not taxed as Company S, as the basis of this plan.

Let&39;s say you are an independent real estate agent and have hired your husband. The MERP plan allows you to reimburse your employee for all medical and dental expenses incurred by his entire family, including his wife. All of these expenses are reimbursable: major medical insurance, long-term care coverage, Medicare and Medigap insurance, copayments, deductibles, prescriptions, dental care, vision care, chiropractic care, orthodontists, fertility treatments, specialized schools for l & 39; learning. disabled children, vitamin and herbal supplements, medical supplies and even over-the-counter medications.

You can pay back your employee or pay directly to health care providers. You will need a written plan document and a method to track your expenses. No special report is required. You will save income tax and tax on self-employment.

If you have non-family employees, you should also include them, but you can exclude employees under the age of 25, working less than 35 hours a week, working less than nine months a year, or having worked for you less than three years. Employees who are not part of the family can make it too expensive to repay everyone as generously as you would your own family. However, if you are offering health insurance, you can still use a plan under section 105 to reduce the cost of your employee&39;s benefits. You can do this by opting for a high deductible health care plan and using a plan under section 105 to replace those lost benefits.

For example, a married independent agent and father of two pays 25% of the federal income tax and 15.3% of the tax on self-employment. A traditional insurance plan was replaced by a high deductible – $ 5,000 for the family that reduced his premium by $ 7,620. Thus, even if he reaches the $ 5,000 deductible, he will save $ 2,620 in bonuses. And now, since he deducts his medical expenses from his business income, his tax savings on self-employment add $ 1,156 to his net income. It will save at least $ 3,121 in tax by moving from its traditional health care plan to the medical expense reimbursement plan set out in section 105.

If you can not use a medical expense reimbursement plan, consider new health savings accounts. These arrangements combine a high deductible health care plan with a tax-free savings account to cover unpaid costs.

To be eligible, you will need a "high deductible health care plan", with a deductible of at least $ 1,200 for singles or $ 2,400 for employees and up to $ 1,200 for a single person. a maximum limit of $ 5,950 for singles or $ 11,900 for families in 2010. Neither you nor your spouse may be covered by a "non-deductible health plan" or Medicare. The plan can not provide benefits other than some preventive care benefits until this year&39;s deductible is satisfied. You are not eligible if you are covered by a plan or a separate rider that offers drug benefits before the minimum annual deductible is satisfied.

Once you have established your eligibility, you can open a deductible health savings account. You can pay 100% of your deductible up to $ 3,050 for singles or $ 6,150 for families. You can use it for most types of health insurance, including continuation plans and long term care COBRA. You can also use it for the same type of expenses as a plan under section 105.

The health savings account does not have the same value as the plan under section 105. You have contribution limits in specific dollars and there is no reason for it. 39, tax benefit for self-employment. But health savings accounts can still reduce your overall health care costs.


If your home office is considered your main place of business, you can deduct a portion of your rent, mortgage interest, property taxes, insurance, maintenance and repairs from your home. your home and utilities. You will also depreciate the base of your home for 39 years as a non-residential property.

To be considered your principal place of business, you must (1) use it "exclusively" and "regularly" for administration or management activities, and (2) have no other fixed location where you do business. administration or management of your profession or business. "Regularly" usually means 10 to 12 hours a week. The space does not have to be an entire room.

The percentage of use of your business is calculated by dividing the number of rooms used by the total number of rooms in the house if they are about equal, or by dividing the square footage used by the total area in square feet of the House. Special rules apply when you sell your home, but the home office deduction remains a very valuable deduction for most agents.


If you take the standard mileage deduction for your business, you may be seriously escaping. Each year, different surveys on the use of vehicles are published. Costs vary depending on your driving – but if you take the standard deduction for a car costing more than 50 cents / mile, you lose money every time you turn the key. If you take the standard deduction now, you can switch to the "real expenses" method if you own your car, but not if you rent. You also can not spend actual expenses on the standard deduction if you took accelerated depreciation on the vehicle.


The rule of thumb is that you can deduct the cost of meals for a legitimate business purpose. This concerns customers, prospects, referral sources and co-workers. And how often do you eat with someone who is not one of these people? For realtors and other professionals who sell, it could be "never". As a general rule, you can deduct 50% of your meals and entertainment as long as they are not "sumptuous or extraordinary".

You do not need receipts for business expenses less than $ 75 (except lodging), but you must record the following information: (1) How much?, (2) When?, (3) Where ?, (4) Commercial object? and (5) business relationship.

You can also deduct entertainment expenses if they occur directly before or after a substantial discussion in good faith directly related to the active conduct of your business. You can deduct the face value of tickets for sporting and theatrical events, food and beverages, parking, taxes and gratuities.


Now that you see how much real estate agents, like you, benefit from so much tax relief, you need to understand what is the biggest mistake of all: do not plan. Have you ever heard the saying "If you do not plan, do you plan to fail?" It&39;s a cliché because it&39;s true.

By simply investing your time, you can implement valuable tax-saving strategies that will make all the difference on April 15th.

Tips for Choosing a "Sleeper" Real Estate Property

Real estate investing is a matter of perception. Your perception of the evolution of the market and its evolution. As always, the goal is to buy low and sell high.

You want to buy inexpensive land and sell it as a high-priced real estate, after appreciating it enough to generate a net profit. The sale of the property is an art in itself.

The purchase of a first parcel of land lends itself to sound rational recommendations:

First, examine the housing price trend curves in your area. While most housing markets are in decline (and housing markets in Florida and California are adjusting after more than a decade of overvaluation), there are markets where housing prices are rising. It is a decent forward indicator that there is a market for expansion.

Second, look for work related news. The purchase of a home requires a stable source of income. New employers who settle in a city or the opening of a government branch are a strong indicator of the opportunity to find good, well-paying jobs. Where well-paying jobs rest, home purchases follow.

In this regard, talk to your local planning office. Are there recent purchases of "rights of way" for the laying of sewer lines? Does the manufacturer of local telephone cables plan to exhaust the fiber optic lines? An unavoidable trend in the construction of new housing. These things indicate areas where the growth of the house is immanent. Educational requirements (found in your local newspaper) and the opening of new parks are other important sources of information.

Before looking at the field, check the use of the adjacent commercial real estate. Look for "family friendly" or "favorable residential" commercial properties: homes close to the grocery store and clothing stores tend to be more expensive than homes that are farther away. If there is a movie theater nearby or if you plan to create an elementary or middle school, consider this element in the size of your home and in its amenities. buyers looking for these features are looking for "mover upper" homes – with a little more floor space and two (or three) rooms for kids. Anchorage stores, such as Wal-Mart and Best Buy, are also to be searched. These companies spend millions in surveys on shopping habits before buying a store. If they buy land, you have about a year to a year and a half to find out about real estate properties near single-family residential and rental properties.

You can even reverse the situation – if you are talking to a group of commercial real estate investors, building a shopping center as the nucleus for home development is also a viable combined strategy. This is also true for very urban areas. Many downtown areas that have been abandoned by businesses can be converted into apartment buildings and some of the older housing developments are being demolished for mixed-use spaces with commercial and residential areas. . In particular, you can often get block grants to help fund projects of this type, and some HUD programs can be very helpful to you in "urban renovations".

Demographics in your area are another source of surveys. Examine United States Census numbers (and local county counts) for the median age and the average birth rate per capita. You want to invest in areas where the population is already growing. Significant biases in & 40; and 39; Fifty years or so indicates that you have a group of people who will soon retire, and retirees are very much inclined to sell their properties. Places to watch are most of California&39;s urban areas and vast expanses of the rural Midwest, where demographic trends have shifted entire cities since the 1950s, when the country&39;s population shifted to urban areas .

If there is a local town planning council or urban development council, be sure to get the minutes of all the meetings of the past year. City Council offices will keep them on file. Also try to attend future meetings as an observer. Talk to city and county officials about construction and housing trends What you are looking for is real estate that will be desirable in two to three years; Check out the Road Planning Atlases and find all the data you can find. Also look for quaint real estate – the lakefront property is as close to a guaranteed bet as you can get by investing in real estate, especially if there is a lake at the "end of the world" d &39;an axis of development. Similarly, if the city council is seeking to acquire land for the parks, buying adjacent land means that you can sell it later.

Finally, talk to professionals in your communities. Talk to the architects who can tell you whether they are busy or not. Maintain professional contacts with engineers, bankers and lawyers. They will usually be aware of projects well before the general public. Also make a habit of reading the business section of the local newspaper. Often, the first clue that a company can install in your area is buried at the bottom of a column on page 8.

Using the instructions above, we will help you find the "dormant" raw terrestrial properties. These "dormant" properties are ideal for low cost and high selling strategies used by successful commercial real estate investors.

Delaware Statutory Trusts

The Delaware Statutory Trust (commonly known as the DST) is, as the name suggests, a legal entity created as a trust under the laws of the state of Delaware. A DST is created for real estate investment purposes and is particularly useful in a 1031 exchange.

In the context of a TSD, investors each have a proportional share of the TSD itself. The DST, in turn, holds the rights to various real estate interests and distributes to investors the potential income from the properties (in the form of rental income or the sale of the property) in proportion to their share of ownership in the DST.

The DST, through its signatory trustee, makes all decisions relating to the property held by the trust, freeing investors from this responsibility. One important thing to note about the summer time is that the trust is not considered a taxable entity. As a result, all profits or losses are transferred to investors in the trust.

With respect to 1,031 exchanges, the IRS has determined that any beneficial interest in the DST is treated as identical to a direct interest in real estate. This means that the properties held by DST fully fulfill the requirements for 1031 exchanges, provided that the other requirements of such exchange are also fulfilled.

For investors who do not seek accountability for day-to-day management and real estate decision-making authority, a TSD may be an excellent choice.

Benefits of a DST

One of the main reasons why investors are so interested in buying an interest in a TSD is the advantage of owning securitized real estate. However, a DST also provides other benefits to investors.

Eliminates the requirement of unanimous approval

Unlike a common rental ownership structure, a DST does not require the unanimous approval of all investors for making decisions about the real estate held. For example, if the economic environment requires the prompt sale of a parcel of land owned by the DST, the decision-making power to register or sell the property belongs to the DST&39;s signatory trustee rather than to the property. to the investors themselves.

Limited personal liability

Due to the "bankruptcy" provision of each hour of hour, individual investors enjoy limited liability with respect to their personal assets. In case of bankruptcy and failure of the DST, the biggest risk to an individual investor is his investment in the trust. The creditors of the trust can not reach any other assets of an investor.

Simplified financing

In order to finance the purchases made by the DST, the lenders treat the DST as a single borrower (rather than scrutinizing each individual investor). This makes financing easier and less expensive to obtain. Similarly, since the individual investor is not subject to credit screening, his individual rating is not affected by participation in a DST.

Requirements for loan forgiveness

Since the rights of a DST investor are limited to receiving distributions and the investor has no voting rights in connection with daily operations, the investor fraud exceptions are eliminated for individual investors. Any lender will only turn to the trustee or signatory sponsor for these waivers.

Lower minimum investment

A DST is allowed up to 499 individual investors, which allows the minimum investment amounts to be well below those of an ICT (allowing only up to 35). This allows investors with fewer investments to continue to participate in a shared ownership strategy for real estate investments.

Risks of a DST

A DST offers many benefits to an investor that are not found in other types of real estate investments in shared ownership. However, DSTs do not carry certain risks, like any other investment.

One of the main risks to consider is the use of a program sponsor to manage the investment. Unlike a common leasing system (TIC) in which individual investors have their say, investors in a DST surrender the day-to-day decision-making power to the program sponsor. This means that if the program sponsor made reckless decisions or became insolvent, the DST could fail without any significant contribution from individual investors.

In addition, as with any investment, the use of a DST for exchange 1031 carries tax risks. Although DSTs are often ideal for this purpose, there is no guarantee regarding the IRS. It is still possible that the IRS does not approve the DST structure or a particular 1031 exchange.

Although the benefits of a DST tend to outweigh the risks, it is prudent to fully understand both when deciding whether or not to participate in a DST.