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By Nathan Vinson, Attorney
English, Lucas, Priest and Owsley, LLP

Improvements to tax law and reducing taxes are a very popular item on most politicians’ platforms. You won’t find anyone who openly says people should pay more. At least, not anyone currently serving in office.

They’re right, by the way – our tax code is far too cumbersome and it changes constantly. (And no, I’m not running for office.)

President Trump has indicated he wants to reform the tax code and change the way people pay taxes. Lawmakers are reportedly discussing how to do that while paying for expensive new initiatives. How can you do it all?

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By Nathan Vinson, Attorney
English, Lucas, Priest and Owsley, LLP

will

Prince performing in concert in Louisville, Kentucky. Photo by Bob Young.

It’s been more than a year since music legend Prince died unexpectedly at his home in Minnesota. He was actively touring and working at the time of his death on April 21, 2016, at the young age of 57.

You’re forgiven if you assumed his estate was long settled, since he died more than a year ago. But it’s not done yet – and may not be for quite a while – due to the fact that he died without a will.

It’s astounding to think that someone who is as famous, prosperous and with as many assets as Prince would die without this basic legal document. But as it turns out, he’s no different than anyone else – he probably didn’t want to think about death.

Whether you die a famous millionaire or with few assets, if you don’t have a Will you can leave a large mess. Heirs you would have never wanted to have your property could get it. Your estate will spend more probating your assets as well, and those who you wished to receive items from your estate may never see them.

Prince was a very charitable man, yet none of his millions he had nor future royalties will benefit those he likely would have preferred to benefit. Plus, the estate will shell out much more than anyone would want to pay in estate taxes.

Your children and family will be far happier if you take care of this before you die – and there’s no doubt it will bring you piece of mind, too.

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By Nathan Vinson, Attorney
English, Lucas, Priest and Owsley, LLP

Most people who have considered making an estate plan or who have already made such a plan, whether simple or complex in nature, are familiar with a living will directive. By Kentucky statute, a living will directive may designate a health care surrogate to make decisions for a person when that person is incapacitated or in a vegetative state. The Living Will Directive may state a person’s wishes regarding life-prolonging treatment, artificially provided nutrition, or donating all or part or all of a person’s body. Living will directives are very common in estate planning.

Most people also know what a do-not-resuscitate order is, but in Kentucky, putting one into legal and practical effect appears to be a little tricky. The only direct, standalone authority for mandatory recognition of a do-not-resuscitate order in Kentucky is a statute authorizing a Kentucky Emergency Medical Services Do Not Resuscitate Order. Therefore, an EMS DNR. The statute requires the EMS DNR to be embodied on a standard form approved by the Kentucky Board of Medical Licensure (click here for form). An EMS DNR, however, only applies to EMS personnel in a pre-hospital setting. From the living room floor to the doors of the hospital, the EMS DNR controls. Once you are in the hospital, assuming you made it that far, the EMS DNR has no effect or control.

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By Nathan Vinson, Attorney
English, Lucas, Priest and Owsley, LLP

This is that time of year when we all start thinking about taxes – and how to pay less. We’ve often gotten the news from our accountants that perhaps our refunds won’t be as large as we’d like or that we owe. Ugh to both.

This is a good time to consider if your business can be more charitably minded, and perhaps help you pare back the tax burden next year.

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By Nathan Vinson, attorney
English, Lucas, Priest and Owsley, LLP

estate debtWhen a spouse, parent or child passes away, it’s incredibly difficult to handle. Beyond your own grief, planning the funeral and handling a thousand different tasks, you may receive calls or letters from creditors who try to convince you that you should pay the debt of the person who died.

In one recent case, a widow received a collection letter from an agency that specializes in collecting debt for creditors of deceased people. The estate had been closed for about a year. She didn’t owe that debt, but the collection agency tried to convince her that she did.

Collecting decedent debts

By law, you don’t owe a debt for someone who died (unless, of course, you owed the debt jointly with the decedent or as a guarantor). Once the person passes away and the proper steps have been taken to handle the probate estate, the opportunity for a creditor to collect unsecured debt is gone.

Credit agencies, especially the less reputable ones, may use all manner of intimidation and even threats to get people to pay debts. These calls can be troubling and confusing for people, especially those who are older or who don’t know the law. It’s important to understand how debt is collected to protect yourself and the people you love.

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By Nathan Vinson, Attorney
English, Lucas, Priest and Owsley, LLP

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Photograph 047 by Lauren Mancke found on minimography.com

Each year, the IRS sets dollar amounts for specific types of exemptions. Usually, these don’t change much – $100 here, $50 here, etc. You’ll need these numbers as you do your taxes this year.

The personal exemption amount for 2016 taxes is $6,300 for an individual or for a married couple filing separately (so that’s per person). As you’d expect, married filing jointly is twice that at $12,600. Head of households can claim $9,300, and surviving spouse $12,600. For anyone who takes the standard deduction and doesn’t itemize, that is the amount you’ll claim.

However, the exemption is subject to a phase-out that begins with adjusted gross incomes of $259,400 ($311,300 for married couples filing jointly). It phases out completely at $381,900 ($433,800 for married couples filing jointly.)

Forbes published an extensive piece that goes into more detail, including tax tables, which you can read here.

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adoptionIf you’ve adopted a child recently or plan to adopt a child soon, congratulations! We help families adopt as part of our family law practice. Expanding your family through adoption is joyful, and we’re thrilled to be a part of it.

Adoptive parents may have some tax advantages that could help now that it is time to start preparing 2016 taxes. One big advantage is the federal adoption tax credit, which allows many adoptive parents to receive a credit to recover some of the costs of adoption. One note, though: the tax credits are not extended to step-parents adopting the child of their spouse. The tax credits are only available if you are adopting a child under the age of 18 or a child who is physically or mentally unable to care for himself or herself.

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By Nathan Vinson, Attorney
English, Lucas, Priest and Owsley, LLP

You’d think giving money away would be easy, wouldn’t you? And for the most part, it is. But it’s important to pay attention to some of the details so you don’t end up getting socked with a tax bill or missing out on a tax deduction in return for your generosity.

In our last post, we discussed how to give money to your children, grandchildren or anyone else you’d like without much complication (such as having to file a gift tax return).  Now, let’s turn to gifting that can net you a tax deduction on your income tax return (in addition to just making you feel good).

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By Nathan Vinson, Attorney
English, Lucas, Priest and Owsley, LLP

giftsIt’s a generous time of year.

There are donations making their way to non-profits, and checks being written in lieu of gifts to family members. If you prefer to give money rather than gifts to children, grandchildren or others on your list, there are a few things you need to know before you write that check.

We’ll address just giving to your children in this blog post; we’ll address giving to charities in part two later this month.

The main point: your gift can trigger your obligation to file a gift tax return if you aren’t careful. We’ll walk you through who you can give to, how you can give and how much you can give. Here’s the official information from the IRS.

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By Nathan Vinson, Attorney

English, Lucas, Priest and Owsley

business womanOwning a business is the American dream for many. It’s building something from your own hands that you’ve shaped and created. It’s long hours, and a labor of love – but in the end – it’s yours. And that’s a fantastic feeling if you’ve got an entrepreneurial streak.

But that feeling of ownership is what keeps a lot of business owners from planning for the future. It’s hard to envision a time when your business will go on without you. Your failure to plan for that inevitability is your biggest vulnerability as an entrepreneur, and can rob you of the equity you’ve built over the years of business ownership.

The best succession plan is one that you make before you need it. It’s on the shelf, ready to go, should something happen to you or other key business owners or managers. It is also a living plan, though, that you should review at least annually and update as needed, just as you would with any other estate documents such as a will or trust.

Even if you don’t see yourself ever leaving your business, creating a plan is a good exercise in thinking about the strategy and purpose of your business, your role in it and the importance of having key people to help you execute your vision. You may find this article from the Small Business Administration on how to exit your business helpful.

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