Category Archives: LLCs

What’s Your Number?

Posted on by under Business Succession Planning, Estate Planning, Family Business, IRA, Kansas, LLCs, Missouri, Retirement, Roth IRA, Small Business, Trusts, Wills

The WSJ has this interesting article about retirement planning. What’s your number? The Wall Street 2: Money Never Sleeps clip features a Wall Street mogul replying with a smile to the young trader’s proverbial “how much is enough” question “more.”

In the WSJ article, Fidelity Investments suggests that folks should save “at least 8 times their final annual pay” for basic retirement living expenses. So if your final salary before retirement is $100,000 per year, you need $800,000 in your IRA or Roth IRA to retire. For younger workers, like myself, Fidelity says that by 35, aim for “an amount equal to your annual pay.” So if you earn $50,000 a year by 35, have $50,000 in your IRA. Fidelity says by 45, you want “three times your salary,” and “five times your salary by 55.” If you’re like me, those numbers are daunting, but it’s not too late to start saving and investing to enjoy your future with your family. After all, compound interest is the 8th wonder of the world. Harnessing the power of compound interest in your IRA or Roth IRA will explode your retirement savings as you go through life.

The WSJ article rightfully recommends “The more you make, the more you need to save, not just in dollars but as a multiple of your final salary.” Lifestyle and standards of living also matter – one person’s comfortable life is another’s posh lifestyle or “slumming it” for yet another person. You don’t have to only use an IRA or Roth IRA for your retirement – stocks, downsizing your house, and other options work fine too – but IRAs and Roth IRAs are among the most tax efficient investments for funding retirement, so you’ll be working less and making more, paying fewer taxes, getting more bang for your buck.

If you don’t have an IRA or Roth IRA, you’re letting a golden opportunity to save and invest money tax free for retirement slip away. If your employer matches your IRA contribution, contribute at least as much as your employer’s match amount. We work with a number of top retirement, insurance, and investment professionals around KC to provide holistic estate planning services for you and your family’s unique needs. If Johnson Law KC LLC can help you review or implement your estate plan, give us a call (913-707-9220) or email (steve@johnsonlawkc.com) at your convenience. We’d love to work with you no matter where you’re at in the process – young professional just getting started in life, mature worker plugging away at work and home, or retired couple trying to leave a legacy for the grandkids. You want our firm’s legal and business expertise on your team and you can rely on our 50 years of combined experience for all your legal needs.

(c) 2012, Stephen M. Johnson, Esq.

Final Boarding Call: Estate Planning in 2012

Posted on by under BDITs, Business Succession Planning, Business Transitions, Dynasty Trusts, Estate Planning, Estate Tax, Family Business, Family Limited Partnerships, Financial Powers of Attorney, Generation Skipping Tax, Gift Tax, Gifts to Minors, Illiquid Assets, Kansas, Living Wills, LLCs, Medical Powers of Attorney, Missouri, QPRTs, Small Business, Special Needs Trusts, Trusts, Wills

The WSJ has this helpful article reminding folks to get their estate plans in order, especially for families with $1 to 5 million+ in assets. As we ring in the new year in a few short months, if Congress hasn’t done anything on the tax front, you’ll see several changes hitting your pocketbook. The Bush tax cuts will expire – so you’ll owe tax if you (1) die with more than a $1 million estate, if you (2) give more than $1 million to family or friends, or (3) if you do more than $1 million generation skipping transfers (e.g. grandparents to grandchildren). Portability is also set to expire, so you won’t be able to use your predeceased spouse’s estate tax exemption. The Obama payroll tax cut will also expire – so you’ll have less take home pay from each paycheck. Like the historically low interest rates now in play, we may not see estate and gift tax laws that allow you to pass on your hard-earned wealth and leave a legacy for your family again in our lifetimes.

Echoing the anecdotes offered in the WSJ article, our firm has been very busy lately, and our appointment calendars are filling up with work, as are the other professionals we work with to best serve clients with a holistic approach. If you need to do any estate planning, business, or real estate work before 2013, it’s time to act. If you have a small business, real estate interests, or other potentially hard-to-value assets, you may need to have an appraisal done before structuring your business succession plan, or setting up a family limited partnership (FLP) or family LLC. Appraisers’ schedules are filling up, so if you’re thinking of passing on your business or real estate holdings, it’s time to bite the bullet and get it done. Your family will thank you and you’ll be able to enjoy the holidays with the peace of mind that everything’s taken care of according to your desires.

We offer a free 1/2 hour consultation, convenient and affordable flat fee billing, and we’re a simple phone call or email away at (913) 7o7-9220 or steve@johnsonlawkc.com. At Johnson Law KC LLC, we look forward to serving your legal needs.

(c) 2012, Stephen M. Johnson, Esq.

Estate Planning Made Easier

Posted on by under Business Succession Planning, Business Transitions, Digital Estate Planning, Estate Planning, Estate Tax, Family Business, Financial Powers of Attorney, Kansas, Living Wills, LLCs, Medical Powers of Attorney, Missouri, Probate, Small Business, Trusts, Wills

Here’s a helpful article from Fox News offering 5 tips for preparing a will and estate planning documents. They are:

1. Make a plan – what do you want to happen to your assets when you die?

2. List your assets – what different accounts, cars, house, and other stuff do you have?

3. Name an executor – who’s going to handle your final affairs and administer your estate?

4. Consult an expert – use a good estate planning attorney, accountant, and financial advisor

5. Leave a note – how do you want your funeral handled? Who should your family call after you die?

While thinking about estate planning is often unpleasant or morbid, we try to make the estate planning process easier and help you gain the peace of mind and assurance that your family is taken care of and well provided for. Whether you’re in Kansas or Missouri, young or old, single or married, wealthy or just starting out your career, we’re here to serve your estate planning needs. Call our office (913-707-9220) or email (steve@johnsonlawkc.com) us for a convenient appointment and let’s begin the estate planning journey together, for you and your family’s sake. We offer a free 30 minute consultation and convenient, no surprises flat fee billing to our estate planning clients.

(c) 2012, Stephen M. Johnson, Esq.

Adjustable Mortgages: Like ‘Em Like Facebook’s Zuckerberg?

Posted on by under Business Succession Planning, Business Transitions, Estate Planning, Estate Tax, Family Business, Financial Powers of Attorney, Kansas, Living Wills, LLCs, Medical Powers of Attorney, Missouri, Probate, Small Business, Trusts, Wills

Mark Zuckerberg, the multi-billionaire co-founder of Facebook, recently took out an adjustable mortgage on his house. But this article wisely cautions that adjustable rate mortgages are not usually a good idea. In Zuckerberg’s case, the idea might make sense because he can invest the money in more profitable ways. Then again, most of us don’t have a $15-20 billion net worth to invest. But like Zuckerberg probably did around the Facebook IPO and his marriage the next day, you should visit your estate planning lawyer to be sure your estate plan is optimized to provide for your family and continue your legacy in the community. If you’ve gotten married, divorced, had children, or had other major life changes happening lately (or coming on the horizon in the next few months), you owe it to yourself and your family to be sure your estate plan is tailored to meet your needs.

Call our office (913-707-9220) or email us (steve@johnsonlawkc.com) for a convenient appointment to review your estate plan. We offer a free 30 minute consultation.

(c) 2012, Stephen M. Johnson, Esq.

Heckerling Insights on Family Businesses and Gift Planning

Posted on by under Business Succession Planning, Business Transitions, Dynasty Trusts, Estate Planning, Estate Tax, Family Business, Family Limited Partnerships, Gift Tax, Gifts to Minors, Illiquid Assets, Kansas, LLCs, Missouri, Small Business

Here’s the first part of the Trusts and Estates annual roundup from the Heckerling Institute in Florida. The Heckerling Institute is America’s premier estate planning seminar for attorneys and other professionals. If we can help you with your family business, gift planning, or other estate planning, call or email us.

(c) 2012, Stephen M. Johnson, Esq.

Take Your Time …. Hurry Up!

Posted on by under Business Succession Planning, Business Transitions, Digital Estate Planning, Estate Planning, Family Business, Family Limited Partnerships, Financial Powers of Attorney, Kansas, Living Wills, LLCs, Medical Powers of Attorney, Missouri, Probate, Small Business, Trusts, Wills

A brief story: In high school trigonometry class, my math teacher used to give us frequent quizzes over basic trigonometry equations and other pre-calculus functions. I vividly recall him pacing up and down the thin aisles of desks (about 20 or 30 students), cradling his hands behind his back, and looking out over the class through his glasses while calling out  “take your time,” then “hurry up!” a few seconds later. It was a charming eccentricity if you weren’t knee deep in a math problem, or an annoying interruption if you were racking your brain to remember that math formula you had stayed up late the night before trying to learn.

The changing economic realities, increased life spans, and increasing standards of living are causing many retirees to go on the “hurry-up offense” with retirement planning. There’s a similar phenomenon in estate planning. The tolling of the New Year bells draws closer, you get married and have a child, you get divorced, a relative dies and you receive an inheritance, or you or your spouse get the dreaded grim health news from the doctor. Time to visit your estate planning attorney.

While several “hurry-up offense” estate planning tactics that can be helpful, I recommend confronting these issues when you are healthy and have some time to contemplate how you want your last affairs handled. We all know that it’s best to make big decisions when you’re calm, relaxed, and feeling great. A Will or trust, living will, and durable financial and medical powers of attorney are the estate planning building blocks that every adult needs. Cross an item off your new year’s to do list, or make a new resolution to take care of your estate planning needs this year. Need to do any digital estate planning for your computer, email, Facebook, LinkedIn, online banking, or other valuable electronic information? Have a small business you’re looking to transition, or thinking about family business succession and your kids? We can help with that too. Call or email us any time to set up a convenient appointment and start off 2012 right with the peace of mind that good planning brings.

(c) 2012, Stephen M. Johnson, Esq.

Conflicts of interest

Posted on by under Business Succession Planning, Business Transitions, Dynasty Trusts, Estate Planning, Estate Tax, Family Business, Family Limited Partnerships, Financial Powers of Attorney, Gift Tax, Illiquid Assets, Income Tax, Kansas, Living Wills, LLCs, Medical Powers of Attorney, Missouri, Prenups, Probate, Small Business, Trusts, Wills

This Daily Mail article highlights a classic case of lawyers (and accountants) getting removed from a case by the judge because of conflicts of interest, in the Clark case, for each being slated for an $8 million bequest from the estate. This is a classic legal ethics question that confronts estate planning attorneys – can the lawyer accept a gift from the estate of the deceased? Short answer is “no.” If a lawyer drafts estate planning documents for family members, the relative is entitled to independent legal counsel if they so choose and the lawyer may not receive more than an intestate share of the estate (e.g. what they would’ve received if the relative had died without a will). A client can theoretically leave gifts to their lawyer or other professional advisors in a will or trust, but those gifts are automatically suspect and best practice is to only be paid your attorney’s fees and not accept gifts from a client’s estate.

If you need legal counsel with year end estate planning or if you’re an attorney who has a conflict of interest and need independent legal counsel to help, give me a call or send me an email. Merry Christmas and see you in the New Year – 2012, here we come!

(c) 2011, Stephen M. Johnson, Esq.

Time to Sell Your Small Business?

Posted on by under Business Succession Planning, Business Transitions, Dynasty Trusts, Estate Planning, Estate Tax, Family Business, Family Limited Partnerships, Financial Powers of Attorney, Generation Skipping Tax, Illiquid Assets, Kansas, LLCs, Missouri, Small Business, Trusts, Wills

Interesting NY Times article about business owners thinking of selling in the current economy. There’s a wonderful piece of old-fashioned, homespun wisdom quoted: “success is when opportunity and preparation intersect.” Successful business people have to be alert for new and emerging opportunities to capitalize on those venues and maximize their enterprise profitability. Perhaps a few business successes come down to being in the right place in the right time, serendipity, or luck, but most business people (and certainly most lawyers) would say that chance favors the prepared – you have to do your homework, which will often show you openings or opportunities that your competitors don’t see. Or as one early rising quipster put it, the comfort of being awake near dawn is “my competition is still sleeping,” so an edge or lead can be acquired. In this economy, business people and successful individuals must capitalize on every edge or lead they can find or create to distinguish themselves and get ahead.

The article’s advice reminds me of a piece of financial/investment advice I read a couple years ago in The Great Depression Ahead by (gloom and doom) economist Harry S. Dent. If I can help you in the process of selling your business or thinking about the pros and cons of the sale decision, give me a call or email me to set up a convenient appointment. If you are going to sell your business, getting the wheels of the deal in motion before December 31 is ideal for tax purposes.

(c) 2011, Stephen M. Johnson, Esq.

Planning for Life’s Unexpected Moments

Posted on by under Business Succession Planning, Business Transitions, Dynasty Trusts, Estate Planning, Estate Tax, Family Business, Family Limited Partnerships, Financial Powers of Attorney, Generation Skipping Tax, Gift Tax, Gifts to Minors, Illiquid Assets, Income Tax, Kansas, Living Wills, LLCs, Medical Powers of Attorney, Missouri, Probate, Small Business, Trusts, Wills

CNBC has this story of a family who benefited greatly from doing basic estate planning, when the unexpected happened and the father and family patriarch died suddenly. Every adult – regardless of age, wealth level, or other factors – needs a will, a living will, and medical and financial durable powers of attorney. To live life without these basic estate planning documents is to play Russian roulette with your future and your family’s.

(c) 2011, Stephen M. Johnson, Esq. All rights reserved.

The Brave New World of Estate Planning – Trusts and Estates in 2011

Posted on by under Business Succession Planning, Business Transitions, Dynasty Trusts, Estate Planning, Estate Tax, Family Business, Family Limited Partnerships, Financial Powers of Attorney, Generation Skipping Tax, Gift Tax, Gifts to Minors, Illiquid Assets, Kansas, LLCs, Missouri, Probate, Small Business, Trusts, Wills

As the 2010 holiday season descended upon America, Congress passed and President Obama signed an extension of the 2001 Bush tax cuts.  The new tax law has many provisions that last until the 2012 election, but most significant for our purposes are the new estate tax and the new gift tax.  The federal estate tax is now 35% on any estates over $5 million for a single person or $10 million for a married couple.  The new gift tax is 50% of any gift to a person of over $13,000 per year with the lifetime exclusion (the maximum amount you can give to someone other than a spouse during your lifetime) now at $5 million from its prior $1 million threshold.  Count on the 2001 Bush tax cut extension to be a big deal for President Obama and his Republican colleagues in 2012, especially with the economic cauldron of high unemployment, exploding deficits, promiscuous and unsustainable spending, a weakening dollar, states teetering on the edge of bankruptcy, and potential inflationary pressures, all boiling to a simmering storm of uncertainty and populist discontent.

Many estate planning attorneys, including many that I have talked with in the Kansas City area, find these new developments very troublesome.  Won’t it eliminate our clients? Not many people have $5 or $10 million, the argument goes.  Those that do already have relationships with private banks, investment firms, and noted law firms. Does anyone still need a trust?  Or do we simply terminate trusts and execute new I-love-you wills that leave everything to the spouse and children?  Won’t that kill our revenue streams from trust drafting and asset re-titling? Is it worth it to be an estate planning attorney any more? These are all good questions that need to be answered and I plan to answer soon in much more detail.

For now, let’s focus on what every client needs: (1) a will (2) a living will (3) a durable medical power of attorney and (4) a durable financial power of attorney.  Anyone over the age of 18 who doesn’t have these legal instruments in place risks catastrophic consequences a la Terri Schiavo and Nancy Cruzan if they get in a car accident or die leaving student loan debt (or other secured debts, like a home mortgage) for their parents (buying life insurance to pay these debts off may be wise). If you are married or have children, the stakes are even higher – your spouse might have to probate your estate and get the Court to appoint them Guardian and Conservator of your child.

Maybe you’re an individual and figure you’re fine, you don’t drive a Ferrari or have millions of dollars, so you don’t need an estate plan, right? Wrong. An estate plan doesn’t need to be expensive or complicated, but you need one, whether you’re Bill Gates or Bob Jones the college student.  Call (913-707-9220) or email me (steve@johnsonlawkc.com) if I can help.

(C) 2011, Stephen M. Johnson