DuPage County estate planning attorney, estate taxes, generation skipping trust, federal estate tax, estate planning lawWhen you pass away, it is understandable that you want to pass down as much property as you can to your loved ones—hard-earned assets that you worked a lifetime to acquire. For most people, the federal estate tax does not apply to their assets, especially now that the minimum taxable estate has doubled to $11.2 million. Any estate smaller than this will not be taxed. However, if your estate does reach the taxable level, the federal government can take up to 40 percent or more of your estate, which is the average tax for a taxable estate.

There are methods to reduce the tax you have to pay, and the average person who paid estate taxes in 2013 (the effective tax rate) was just 16.6 percent, according to Time Money. One practical way to reduce the size of your estate, and therefore bypass estate tax, is to create what is called a generation skipping trust.

Generation Skipping Trust May be Better than Yearly and Lifetime Gifting

Just one out of 700 Americans have an estate large enough to tax. As such it is rare for any estate to have to pay estate tax nowadays. Yearly gifts, per person, can be up to $15,000 without being taxed. A husband and wife can each give $15,000 to as many heirs as they want, each year, without being taxed. However, if the lifetime gifting amount is reached for either, the gifts begin to fall under the estate tax and gift tax exclusion, according to Forbes.

One method of reducing the size of one’s estate is to begin making yearly maximum gifts to children and grandchildren; still, even this may not be enough to reduce your estate in time, and again the gifts can eventually exceed the lifetime gifting amount if enough people are gifted. A generation skipping trust can be set up for your grandchildren, skipping the generation of your children and therefore bypassing estate tax as well.

Who is Eligible?

In addition to applying to grandchildren, you can set up a generation skipping trust for anyone who is not related to you and is at least 37.5 years younger than you, other than your spouse or ex-spouse. A bonus is that your children can profit from this generation skipping trust as well, by utilizing the profits made by the assets within the trust.

Reach Out to an Estate Planning Attorney Today

An experienced DuPage County estate planning attorney can help explain the benefits of a generation skipping trust, as well as help you set it up to minimize or cut out all of the taxes you would have to pay otherwise. Contact Momkus McCluskey LLC for more information.

Sources:

http://time.com/money/4444752/how-many-people-pay-estate-death-tax/

https://www.forbes.com/sites/ashleaebeling/2017/10/19/irs-announces-2018-estate-and-gift-tax-limits-11-2-million-per-couple/#50606a8a4a4b

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division of pension, divorce and finances, DuPage County divorce attorneys, retirement and divorce, retirement savingsFor couples over 50 who have planned well for retirement, a pension plan, 401(k) account, or a traditional IRA or Roth IRA (Individual Retirement Account) is likely to be the largest asset that will be divided during divorce.

The average 50-55-year-old household has a little under $125,000 saved for retirement, according to CNBC. It is also one of the more complicated assets to divide, and most contentious, as the higher earning spouse may believe that these savings were earned solely by him or her. In fact, the percentage of retirement savings distributed to the lower earning spouse (if one of the spouses has earned less) depends on a variety of factors. These include the length of the marriage, what the lower earning spouse gave up in order to help build the career of the other, and the financial and non-financial contributions each spouse brought to the marriage, such as homemaking, raising children, etc.

It is common for couples who have been married in Illinois longer periods of time to have their retirement savings divided equally during divorce, because Illinois is an equitable distribution of property state. Assets are divided “fairly,” but not necessarily equally. However, alimony can help make up additional finances in the event the lower earning spouse does not receive an equal share of the retirement plan or other marital property.

Qualified Domestic Relations Order for Pension Plans or 401(k) Accounts

A qualified domestic relations order (QDRO) is necessary for the spouse whose name is not attached to a pension plan or 401(k) account. Not all divorce attorneys are familiar or experienced with QDROs, as this is not part of a divorce agreement. For every pension plan or 401(k), a separate QDRO document is needed.

Similarly, each QDRO needs to describe how and where the money is being transferred. Many choose to have 401(k)s rolled over into IRA accounts or Roth IRA accounts, where the account is taxed upfront so that no taxes need to be paid when assets are taken out.

If you choose to have the assets of a pension plan or 401(k) transferred directly to you, and bypass an IRA, income taxes must be paid, which can be significant. Choosing wisely during this process can break or save you, though in some cases the recipient may not have any choice but to take the money out, either due having a medical issue or other immediate financial need.

Contact a Divorce Attorney Today

Division of retirement accounts is complicated, and is something that should not be taken an alone or by an inexperienced attorney. For more information, contact the dedicated DuPage County divorce attorneys of Momkus McCluskey LLC. today to set up a consultation.

Sources:

https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs/qdro-overview

https://www.cnbc.com/2017/04/07/how-much-the-average-family-has-saved-for-retirement-at-every-age.html

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business assets, DuPage County family law attorneys, marital debt, premarital agreement, divorce and financesPremarital agreements are often associated with the wealthy. The cliche goes as follows: A young, attractive woman weds an older, wealthy man who insists on signing a premarital agreement in order for the marriage to occur so that he does not have to share his finances in the event of a divorce. While it is true that some wealthy people chose to enter premarital agreements, this is not the most common reason.

One Spouse is a Business Owner

If a couple decides to get married and one partner is a business owner, he or she may want to protect his or her business in the event of a divorce — business assets earned during the course of a marriage are considered marital property.

For example, if a small business was only worth a few thousand dollars before the marriage, but worth $4 million 10 years later at the time of divorce, essentially all of the business is marital property. Furthermore, because the business cannot be chopped up and sold just for the other partner to get his or her fair share of the marital property, he or she will either become a partial owner or will end up with the majority of the other marital property. Moreover, the value of a business is difficult to determine. The other party’s attorney may overvalue the business, thus leaving the business owner with even less of the other marital property. While the non-business owner is awarded the house, vehicles, furniture, bank accounts, and investments, the other spouse could only be left with the business, which may technically be worth a fair amount, but it would have to be sold to pay for a new home.

Debt Protection

If one of the spouses has a large amount of debt, then his or her credit can negatively impact the credit score of the other spouse once the couple is married and has joint credit cards. According to Credit.com, however, a premarital agreement can include a clause stating that credit scores must be checked frequently and that the marriage will not have any joint credit cards or shared bank accounts. Any additional measures may also be included to protect one spouse from the poor credit (and debt collectors) of the other.

It is even more important to consider debt. While debt prior to a marriage remains the debt of each spouse, debt incurred during the marriage becomes both of the spouse’s debt. Student loans, car loans, mortgages, credit card debt, and all other forms of secured and unsecured loans become marital property.

Reach Out to an Attorney for Help

Illinois is an equitable division of marital property state, according to 750 ILCS 5/503. As such, all debts, businesses, and credit are shared when obtained during a marriage, and this marital property is split “fairly.” A premarital agreement offers business partners reassurance and provides a degree of protection for spouses with good credit, making it easier to get loans that will benefit both spouses. For more information about how a premarital agreement can help your marriage, contact the dedicated DuPage County family law attorneys at the office of Momkus McCluskey LLC. today.

Sources:

http://blog.credit.com/2014/08/can-a-prenup-protect-your-credit-score-91543/

http://www.ilga.gov/legislation/ilcs/documents/075000050k503.htm

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DuPage County intellectual property attorneys, intellectual property infringement, IP infringement cases, DuPage County business owner, intellectual property lawsBusinesses are dependent upon their unique characteristics — attributes that can separate companies from failure and success. Valuable information, most commonly in the form of intellectual property, is what differentiates a business from its competition.

As a business owner, you may have poured countless hours and resources into developing your intellectual property in hopes to produce future value. Yet when your intellectual property — be it copyright, trade secret, or trademark — is stolen, the infringing party must be held accountable for the theft of your company’s assets. Strong legal action must be taken in this crucial moment of time before your losses are exacerbated and before the other party has months to mount a defense and continue profiting from your intellectual property.

When negotiations fail, the only way to move forward is to take the other party to court to ensure that your financial compensation is maximized to fairly represent your damages.

Intangible Property is the Fastest Growing Segment of the Economy

The changing tides in gross domestic product (GDP) can be seen in one chart, where today 14 percent of private sector growth is in intangible assets, whereas only 10 percent is tangible assets — a trend that was flipped 40 years ago, according to the Wall Street Journal. In fact, intangible assets make up 80 percent of a corporation’s balance sheet, according to Forbes, compared to decades ago when they only made up 20 percent.

Intangible property is everything of value in your company that cannot be picked up or touched — it is a client list, trademark, copyright, trade secret, goodwill, or a patent. Much of a company’s intangible property is protected by intellectual property (IP) laws, though these laws are constantly changing. As such, your attorney must have a firm grasp on IP law in order to take a case to court. Furthermore, your attorney must be able to prove the value of your intellectual property and show your damages.

Our Intellectual Property Attorneys are Ready to Start on Your Case Today

Due to the complexity and importance of your case, intellectual property litigation should only be placed in the hands of a fully competent and highly experienced legal team. Contact the dedicated DuPage County intellectual property attorneys of Momkus McCluskey, LLC today to discuss your legal options and to get started on your case at once. Our lawyers have successfully handled many IP infringement cases and have fought for and reached exceptional outcomes for our clients.

Sources:

https://www.wsj.com/articles/accountings-21st-century-challenge-how-to-value-intangible-assets-1458605126

https://www.forbes.com/sites/christopherskroupa/2017/11/01/how-intangible-assets-are-affecting-company-value-in-the-stock-market/#55d4254e2b8e

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DuPage County Business Law Attorneys, environmental crimes, environmental regulations, illegal dumping, environmental complianceThe city of Aurora is finally going to settle with the company that once owned a used car lot, Broadway Limited of Aurora, LLC, and was found guilty of several environmental crimes, including illegal dumping of waste products. With a special use permit granted back in 2002, the owners were able to turn the lot into a waste transfer station, which salvage yards used to store waste materials, as reported by the Chicago Tribune. The state of Illinois fined the company for the following in 2003:

  • Failing to remove and fill the unused underground storage tanks on the property; and
  • Not complying with the special use permit that required paving and car lot striping.

A lawsuit was filed in 2006, alleging the company of open dumping of waste, not having a permit for the operation of a waste management facility, open dumping of used or waste tires, improperly storing waste tires, and failing to keep proper records and pay necessary fees.

The following year, 2007, five defendants pled guilty in Kane County Circuit connected to illegal dumping. At the time, Aurora, Illinois Mayor Tom Weisner called the act “one of the most egregious examples of environmental betrayal.”

A settlement is expected soon, and over a million dollars has been spent on cleaning up the site since 2007 with grants from the Illinois Environmental Protection Agency and the federal Clean Water Act.

The Problem with Illegally Dumping Used Tires

Used tires have many uses, including fuel derived from tires, civil engineering applications, and ground crumb rubber used in molded rubber products and rubber-modified asphalt, according to the Illinois Environmental Protection Agency. When used tires are left out in the open to slowly decay, however, they provide the perfect breeding grounds for mosquitos, which can carry deadly diseases such as malaria, Zika, Dengue Fever, and the West Nile Virus. Used tires also present a burning hazard, which can negatively affect land, air, and water in a large area surrounding the burn sight.

Illinois has strict environmental regulations surrounding used tires, and simply dumping them or storing them in a field is illegal and can seriously cost a business in the long run, not to mention potential criminal and civil charges.

There are strict regulations for:

  • Tire retailers;
  • Used tire transporters;
  • Storage facilities; and
  • Private citizens.

A Chicago Environmental Compliance Attorney Can Help You Today

Complying with state and federal dumping environmental regulations can be complicated, and the risk of making an error is great. To prevent such a catastrophe for your business, consider consulting with an environmental compliance attorney to ensure that you are not violating the law. Contact the talented DuPage County business law attorneys at Momkus McCluskey LLC, today to set up a meeting.

Sources:

http://www.chicagotribune.com/suburbs/aurora-beacon-news/news/ct-abn-aurora-broadway-st-0511-story.html

http://www.epa.illinois.gov/topics/waste-management/illegal-dumping/index

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