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Coronavirus businesses

C19 UPDATE: Confused About Coronavirus Relief for Small Businesses and Independent Contractors?

C19 UPDATE: Confused About Coronavirus Relief for Small Businesses and Independent Contractors?

The federal government’s $2 trillion economic relief plan passed last month offers help for small businesses affected by the coronavirus pandemic. Provisions include cash grants, low-interest loans and payments to offset payroll costs for businesses that retain workers or rehire those they have laid off, and enhancements to unemployment insurance and paid leave.

The New York Times has compiled explanations and answers to Frequently Asked Questions about these programs to help relieve some of the confusion and guide business owners, employees, and contractors seeking help.

The article, F.A.Q. on Coronavirus Relief for Small Businesses, Freelancers and More does not require a paid subscription to read.

Some highlights

Who is eligible for relief?

Businesses and nonprofit organizations with fewer than 500 workers. Independent contractors (1099) and freelancers also may be eligible.

What help is being offered?

There are two main federal aid programs, both managed by the Small Business Administration.

The Paycheck Protection Program is a forgivable loan intended to pay for eight weeks of a business’s payroll costs, so the company can retain workers or hire back those it has already laid off.

The Economic Injury Disaster Loan Program also offers low-interest loans to cover most business expenses. A portion of these loans may be forgiven.

Other FAQs:

  • How Much Can I Borrow?
  • What if I Already Laid Off My Workers?
  • How Much Hardship Do I Have to Have to Apply?
  • What Documents Do I Need to Apply?
  • How Does Loan Forgiveness Work?

If your banker is not participating in these programs, the Small Business Administration (SBA) offers a search tool to help you find nearby lenders: https://www.sba.gov/paycheckprotection/find

Resource: The New York Times, FAQ on Coronavirus Relief for Small Businesses, Freelancers and More, April 9, 2020.

Read more related articles at:

What the coronavirus relief bill offers for small businesses

Also, read one of our previous Blogs:

C19 UPDATE: CDC Updates Coronavirus Guidance for Businesses

Inheritance

How Do I Do the Most with My Inheritance?

How Do I Do the Most with My Inheritance?  Studies have shown that when people unexpectedly come into money, they’ll treat it differently than the money they’ve earned.

Forbes’ recent article entitled “5 Important Steps To Maximize An Inheritance” says that even the most financially astute consumers can get inundated with their newfound wealth. People can feel pressure to use the cash to purchase new vehicles, bigger homes, or even take their families on dream vacations. Others may feel that they can safely quit their jobs and live the life of luxury.

Many people regret jumping into major purchases after getting an inheritance. Others will give away much of the money or even make bad investments that are completely wrong for their goals and financial needs. If you don’t get expert financial guidance to develop a plan for your inheritance, or take the time to do it yourself, you may find yourself worse off than you were before you became wealthier via an inheritance.

Here are some financial planning tips for anyone who is receiving an inheritance or another windfall.

Do Something Fun. Set aside an amount to splurge on something fun. However, figure out how much you want to spend and on what. Without that, you may find that one small splurge turns into many, and next thing, a big chunk of your inheritance could be spent.

Taxes on Your Inheritance. It’s uncommon for someone to get an inheritance big enough to trigger the federal estate tax. However, estate taxes will vary at the state level, so check with your estate planning attorney. Depending on the type of assets you inherit and how they’re held, you may owe taxes on some of your newfound riches.

Quitting Your Job. This sounds tempting, but before you take this big step, make sure you’ve thought it through and that you have a plan to replace your income. It’s not hard to underestimate how much money you’ll actually need to provide a nice standard of living for the rest of your life.

Take Care of Yourself. When you come into money, you’ll hear from relatives you never knew you had. They’ll all be asking for money. Make sure your own finances are in order, before you commit to take care of others beyond your immediate family.

Consult Experts. An inheritance can be stressful and overwhelming, so talk to an experienced estate planning attorney. He can help with tax filing deadlines and provide strategies to protect that wealth.

That’s some ways you do the most with your Inheritance?

Reference: Forbes (Feb. 26, 2020) “5 Important Steps To Maximize An Inheritance”

Read more about this at:

4 Smart Things to Do When You Get an Inheritance

What to Do With an Inheritance

Also read some of our previous Blogs at :

Can I Protect an Inheritance During Marriage?

What Do I Tell My Children About Their Inheritances?

 

 

IRS COVID TAXES

C19 UPDATE: IRS Postpones Gift and GST Tax Filing Deadline to July 15

C19 UPDATE: IRS Postpones Gift and GST Tax Filing Deadline to July 15.  The IRS has expanded the list of deadline extensions for federal taxes and tax returns to include gift and generation-skipping transfer (GST) tax returns. An earlier notice had applied only to federal income tax returns and payments (including self-employment tax payments) due April 15, 2020, for 2019 tax years, and to estimated income tax payments due April 15, 2020, for 2020 tax years.

Notice 2020-20 updates earlier guidance to include the gift and GST deadline extensions.

What Are Gift and GST Taxes?

Gift Taxes. The Internal Revenue Code imposes a gift tax on property or cash you give to any one person, but only if the value of the gift exceeds a certain threshold called the annual gift tax exclusion, currently $15,000 per person. You can give away the amount of the exclusion each year without incurring a tax. The giver is responsible for paying this tax, not the recipient.

GST Taxes. The generation-skipping transfer (GST) tax can be incurred when grandparents directly transfer money or property to their grandchildren without first leaving it to their parents. These types of transfers share the same lifetime exemption as the federal estate and gift taxes, and are also subject to an annual exclusion limit of $15,000 per person.

So thankfully, the  IRS Postpones Gift and GST Tax Filing Deadline to July 15, which gives taxpayers three more months to file their taxes.

Resource: Financial Planning, IRS postpones deadline for gift and GST taxes due to coronavirus, https://www.financial-planning.com/news/irs-offers-relief-on-gift-and-generation-skipping-transfer-taxes-due-to-coronavirus

Read more related articles at:

Tax Day now July 15: Treasury, IRS extend filing deadline and federal tax payments regardless of amount owed

IRS postpones deadline for gift and GST taxes due to coronavirus

Also read our previous Blog at:

How Does the IRS Know if I Make Gifts To My Grandchildren?

 

 

Family Farm

What Do Farmers Need to Create an Estate Plan?

What Do Farmers Need to Create an Estate Plan? Planning for the end of life is intimidating for everyone, but when the plan includes a family business like a farm or ranch, things can get even more challenging. That’s why estate planning, that is, planning for the distribution of assets once you die, is especially important for aging farmers. The details are in the article “How farmers can start an estate plan” from Bangor Daily News.

Death and dying are not easy to talk about, but these conversations are necessary, especially if the family wants to continue as a farming or ranching family. For aging farmers and their families, here are a few tips to demystify the planning process and help get things started.

What are your goals? Think of estate planning as succession planning. This is about making decisions about retirement and handing down a business to the next generation. If you had a regular job, you’d have far less to consider. However, succession planning for a family business owner involves more resources and more people. Having a clear set of goals, makes that transition easier. Add to that list: your fears. What don’t you want to happen? If your children don’t know how much you want them to keep the farm in the family, they may take other actions after you die. Share your goals, hopes and yes, worst case scenarios.

Build a team of professionals. The number of moving pieces in a family farm means you’re going to need a strong team. That includes an estate planning attorney who has worked with other farm families, an accountant, a financial advisor and an insurance professional. Depending on your family’s communication skills, you might even consider bringing a counselor on board.

List out your assets. Don’t assume that anyone in the family knows the value of your assets. That includes deeds to land, titles of ownership for vehicles, information about any property mortgages or loans or leases. If you are leasing land to others, you’ll need the lease agreements as well as property titles. If your lease agreements are based on a handshake, your attorney may request that you formalize them. A verbal agreement may be fine while you are living, but if you should pass and your heirs don’t have the same relationship with your tenant, there could be trouble ahead.

Consider who will be in charge when you are not there. Whether you are planning to work until you die or making a retirement plan, one of the hardest decisions will be to name a successor. Inter-generational politics can be tricky. You’ll need an unbiased evaluation of who the best candidate will be to take things on. However, going into this now is better than hoping for the best. That’s when things go south.

Talk to your estate planning attorney. Just as people should start planning for their retirement as soon as they start working, planning for the transition of the family farm is something that should start when it is years in the future, not when the transition is a few months away. It’s a process that takes a long time to do right. This should shed some light on if Farmers Need to Create an Estate Plan?

Reference: Bangor Daily News (March 5, 2020) “How farmers can start an estate plan”

Read More about this at : 

Good farm policy: Avoid these top 10 estate planning mistakes

Estate Planning for Family Farms: What to do with the Land

Also read one of our previous Blogs:

Small Business Owners Need Business Succession and Estate Planning

 

Guidance for businesses

C19 UPDATE: CDC Updates Coronavirus Guidance for Businesses

C19 UPDATE: CDC Updates Coronavirus Guidance for Businesses

As we learn more about the coronavirus the Centers for Disease Control (CDC) is updating the guidance they give to business owners and employers. They issued updates on Friday, March 21st to include

  • Updated cleaning and disinfection guidance
  • Updated best practices for conducting social distancing
  • Updated strategies and recommendations to be implement now to respond to COVID-19

Older adults and people who have severe underlying chronic medical conditions like heart or lung disease or diabetes seem to be at higher risk for developing more serious complications from COVID-19 illness.

Based on what we know now, those at high-risk for severe illness from COVID-19 are:

People of all ages with underlying medical conditions, particularly if not well controlled, including:

  • People with chronic lung disease or moderate to severe asthma
  • People who have serious heart conditions
  • People who are immunocompromised
    • Many conditions can cause a person to be immunocompromised, including cancer treatment, smoking, bone marrow or organ transplantation, immune deficiencies, poorly controlled HIV or AIDS, and prolonged use of corticosteroids and other immune weakening medications
  • People with severe obesity (body mass index [BMI] of 40 or higher)
  • People with diabetes
  • People with chronic kidney disease undergoing dialysis
  • People with liver disease

We hope this sheds more light on updates for Coronavirus Guidance for Businesses

If you are a business owner, you may want to bookmark this page and check back regularly for updates: https://www.cdc.gov/coronavirus/2019-ncov/community/guidance-business-response.html

Resource: Interim Guidance for Businesses and Employers to Plan and Respond to Coronavirus Disease 2019 (COVID-19), updated March 21, 2020, https://www.cdc.gov/coronavirus/2019-ncov/community/guidance-business-response.html

Read more about this from the CDC:

Interim Guidance for Businesses and Employers to Plan and Respond to Coronavirus Disease 2019 (COVID-19)

Resources for Businesses and Employers

Also read one of our previous Blogs:

C19 UPDATE: Small Businesses Hurt by COVID-19 May Qualify for SBA Disaster Relief Loans

Young Family

Estate Planning Is For Everyone

Estate planning is something anyone who is 18 years old or older needs to think about, advises the article “Estate planning for every stage of life from the Independent Record. It includes much more than a person’s last will and testament. It protects you from incapacity, provides the legal right to allow others to talk to your doctors if you can’t and takes care of your minor children, if an unexpected tragedy occurs. Let’s look at all the ages and stages where estate planning is needed.

Parents of young adults should discuss estate planning with their children. While parents devote decades to helping their children become independent adults, sometimes life doesn’t go the way you expect. A college freshman is more concerned with acing a class, joining a club and the most recent trend on social media. However, a parent needs to think about what happens when the child is over 18 and has a medical emergency. Parents have no legal rights to medical information, medical decision making or finances, once a child becomes a legal adult. Hospitals may not release private information and doctors can’t talk with parents, even in an extreme situation. Young adults need to have a HIPAA release, a durable power of medical attorney and a power of attorney for their finances created.

New parents also need estate planning. While it may be hard to consider while adjusting to having a new baby in the house, what would happen to that baby if something unexpected were to affect both parents? The estate planning attorney will create a last will and testament, which is used to name a guardian for any minor children, in case both parents pass. This also includes decisions that need to be made about the child’s education, medical treatment and even their social life. You’ll need to name someone to be the child’s guardian, and to be sure that they will raise your child the same way that you would.

An estate plan includes naming a conservator, who is a person with control over a minor child’s finances. You’ll want to name a responsible person who is trustworthy and good with handling money. It is possible to name the same person as guardian and conservator. However, it may be wise to separate the responsibilities.

An estate plan also ensures that your children receive their inheritance, when you think they will be responsible enough to handle it. If a minor child’s parents die and there is no  plan, the parent’s assets will be held by the court for the benefit of the child. Once the child turns 18, he or she will receive the entire amount in one lump sum. Few who are 18-years old are able to manage large sums of money. Estate planning helps you control how the money is distributed. This is also something to consider, when your children are the beneficiaries of any life insurance policies. An estate planning attorney can help you set up trusts, so the monies are distributed at the right time.

When people enter their ‘golden’ years—that is, they are almost retired—it is the time for estate plans to be reviewed. You may wish to name your children as power of attorney and medical power of attorney, rather than a sibling. It’s best to have people who will be younger than you for these roles as you age. This may also be the time to change how your wealth is distributed. Are your children old enough to be responsible with an inheritance? Do you want to create a legacy plan that includes charitable giving?

Lastly, update your estate plan any time there are changes in the family structure. Divorce, death, marriage or individuals with special needs all require a different approach to the basic estate plan. It’s a good idea to revisit an estate plan anytime there have been major changes in your relationships, to the law, or changes to your financial status.

Reference: Independent Record (March 1, 2020) “Estate planning for every stage of life

Read more relevant articles at:   ESTATE PLANNING IS FOR EVERYONE/globalwealthadvisors

You’re never too Young to Estate Plan

Also Read our previous gs at :  Creating an Estate Plan Should Be a New Year’s Resolution

                                                          Am I Too Young to Think About Estate Planning?

 

 

 

COVID 19 AND SMALL BUSINESSES

C19 UPDATE: Small Businesses Hurt by COVID-19 May Qualify for SBA Disaster Relief Loans

C19 UPDATE: Small Businesses Hurt by COVID-19 May Qualify for SBA Disaster Relief Loans.  It’s estimated that some 30 million US small businesses may fall victim to the coronavirus through closures, cancellations and other revenue losses. With no clear end in sight, the Small Business Administration (SBA) is offering eligible businesses low-interest disaster relief loans to cover operating expenses.

These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact. The interest rate is 3.75% for small businesses. The interest rate for non-profits is 2.75%. In order to keep payments affordable, they are offering long-term repayments, up to a maximum of 30 years. Terms are determined on a case-by-case basis, based upon each borrower’s ability to repay.

The U.S. Small Business Administration is offering designated states and territories low-interest federal disaster loans for working capital to small businesses suffering substantial economic injury as a result of the Coronavirus (COVID-19). Upon a request received from a state’s or territory’s Governor, SBA will issue under its own authority, as provided by the Coronavirus Preparedness and Response Supplemental Appropriations Act that was recently signed by the President, an Economic Injury Disaster Loan declaration.

For more information on areas currently eligible for SBA disaster relief and to apply for a loan, visit the SBA website at https://www.sba.gov/disaster-assistance/coronavirus-covid-19 or call the SBA disaster assistance customer service center at 1-800-659-2955 (TTY: 1-800-877-8339) or e-mail  [email protected]

Resources: SBA Disaster Assistance in Response to the Coronavirus.

Read Related Articles at :

SBA to Provide Disaster Assistance Loans for Small Businesses Impacted by Coronavirus (COVID-19)

SBA Updates Criteria on States for Requesting Disaster Assistance Loans for Small Businesses Impacted by Coronavirus (COVID-19)

Also read one of our previous Blogs at:

C19 UPDATE: Paying for Covid-19 Testing and Treatment if You Have a High Deductible Insurance Plan

C19 UPDATE: Emergency Estate Planning Decisions to Make Right Now

Princes brother

How Does the Death of Prince’s Brother Impact the Late Rock Star’s Estate?

How Does the Death of Prince’s Brother Impact the Late Rock Star’s Estate?  Alfred Jackson was one of six of Prince’s siblings who were heirs to their brother’s fortune worth at least $100 million. But they sold 90% of his estate rights last year to Primary Wave, a well-funded and growing entertainment company that invests in music publishing and recording rights. Prince’s sister Tyka Nelson also struck a deal with Primary Wave, and was given cash up front as the estate proceedings drag on.

The StarTribune’s recent article entitled “Death of Prince heir complicates estate settlement even more” reports that because of these moves, about a third of Prince’s assets could wind up being controlled by parties who were not related to him—which adds to the tough job of settling the late rock star’s estate.

Just a few hours after signing with Primary Wave in August of 2019, the sixty-six-year-old Jackson succumbed to heart disease, while at his home in Kansas City. However, unlike Prince, he had signed a will. Jackson did not have a wife or children. However, in another twist, rather than leaving his estate to his siblings, he bequeathed all his assets to a friend, Raffles Van Exel, who claims to be an entertainment consultant. However, he’s best known for hanging out with Whitney Houston in her final days, as well as Michael Jackson’s family. Exel was also a creative force behind O.J. Simpson’s notorious “If I Did It” book project.

Primary Wave’s deal with Jackson is being reviewed by his own family, at least his siblings who aren’t related to Prince. They aim to contest his will.

Prince’s accidental death by fentanyl in 2016 created one of the largest and most complicated probate court proceedings in Minnesota history. That’s because the rock star failed to draft a will. The value of his estate is somewhere between $100 million to $300 million estate and is comprised of potential music royalties.

Prince’s heirs are unable to get their money from his estate until it is settled. Because the probate proceedings are dragging on, Primary Wave offered Prince’s heirs the chance to raise cash by selling their estate rights. These heirs are all approaching 60Jackson wanted to enjoy life now, rather than wait for the process to be finalized. The siblings, by that time, may be too old, sick or dead to enjoy their inheritance.

Primary Wave tried to get at least three of Prince’s siblings — Sharon, Norrine, and John Nelson, to sell their estate rights. However, the three refused and said in a recent court filing that they are concerned that Primary Wave will use its deep pockets to their detriment. The company’s involvement would only lead to more delays and tensions, the siblings said in a letter directly to the probate judge. With the case draining their “limited resources,” the three explained that they are unable to pay legal counsel in this case and are representing themselves.

The terms of Primary Wave’s deals with Tyka Nelson and Alfred Jackson are private. However, the company has been asserting its rights in Prince’s probate case. A 2019 court filing said that the company says it “stands in the shoes” of the two heirs. That is How  the Death of Prince’s Brother Impacts the Late Rock Star’s Estate.

Reference: StarTribune (February 22, 2020) “Death of Prince heir complicates estate settlement even more”

Read more related articles at: 

Death of Prince heir complicates estate settlement even more

Prince’s Posthumous Year In Business Was Full Of Weirdos And Chaos

Read about other Celebrity Estate stories on one of our previous Blogs at:

Luke Perry’s Estate Planning – How Well Did He Do?

Why is Angelina Jolie Leaving Her Total Estate to Just One of Her Kids?

 

Walt Disney and his Grandchild

What are Walt Disney’s Heirs Worth?

What are Walt Disney’s Heirs Worth?  It’s not known just how much the Disney family is worth. GOBankingRates estimated the company’s net worth to be roughly $130 billion. Roy O.’s grandson, Roy P., said at one point that the family owns less than 3% of the company. Even so, that would put their fortune around $3.9 billion (not counting any investments in addition to Disney holdings).

Wealth Advisor’s recent article entitled “Disney Family Feud As Heirs Battle For $400 Million Trust Fund” says that in 1925, Walt married Lillian Bounds, a studio inker. Eight years later, she gave birth to Diane, and the couple later adopted their daughter Sharon as a baby.

Walt Disney is said to have adored his 10 grandchildren. When he died in 1966 of lung cancer, he left numerous trusts and family foundations for his family and heirs.

Walt’s younger daughter, Sharon, adopted one child, Victoria, with her first husband, Robert Brown. She then had twins, Brad and Michelle, with her second husband, Bill Lund. She died from breast cancer in 1993 at age 56. Michelle has never had a job and owns three homes, spending a lot of time in Newport Beach, CA according to Gardner.

Victoria reportedly lived an extravagant lifestyle that included $5,000-a-night suites at the Royal Palms in Las Vegas. One report notes that she once went on a Disney cruise ship and destroyed her suite to such a degree that Michael Eisner, then-CEO of the company, had to ask the trustees to pay for the damages. Her share of the family fortune was added to Brad’s and Michelle’s after she died in 2002 from health complications. However, Sharon’s twins later became embattled in a years-long feud over their $400 million trust fund. That inheritance was supposed to be distributed in annual payments and lump sums at five-year intervals at ages 35, 40, and 45. However, the trustees dispersed the payments to Michelle and withheld Brad’s.

Michelle and the trustees argued that Brad wasn’t able to take care of his share because of a “chronic cognitive disability” and that Bill, their father, was taking advantage of this to gain money, according to NBC News.

Bill said that the trustees were manipulating his daughter Michelle. Bill was previously a trustee but resigned after an allegation that he used trust money to gain more than $3 million in kickbacks from a real-estate deal. He reportedly agreed to an annual settlement of $500,000.  So we truly do not know what the Walt Disney’s Heirs Worth.

Reference: Wealth Advisor (Feb. 11, 2020) “Disney Family Feud As Heirs Battle For $400 Million Trust Fund”

Read some related articles at:                  The Disney’s, not the happiest family on Earth. /nbcnews.com

Disney Family Networth: Meet the family behind the media empire/businessinsider.com

Also Read one of our previous Blogs:                Are You Considering the Impact of Your Estate Plan on your Heirs?

 

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