Entity Formation
You are the expert in your industry, and you know the right decisions to make, you just need to know how to adjust the legal structure of your business to match your vision.
Some of the most common business entity choices include corporations, partnerships, and limited liability companies, also known as LLCs. Corporations offer protection to officers, directors, and shareholders, who typically cannot be held liable for corporate debts or negligence. We provide the documents required to successfully operate a legally established organization under state and federal guidelines, including but not limited to:
- operating agreements
- partnership agreements
- buy/sell agreements
- commercial leases
- financing documents
Corporate Restructuring
Holmes Legal Group handles reorganizing legal, ownership, operational, or other structures of businesses under various circumstances such as profitability issues, emerging needs, change of ownership or ownership structure, Demerger, Bankruptcy, Repositioning, or Buyout.
Audits and Levies
-Our skill at resolving complex tax matters is matched by our commitment to client service. Dealing with the IRS or other tax agencies is draining. Our objective is to help our clients resolve their underlying legal issues, while also alleviating the anxiety and emotional turmoil that can accompany these matters. Any tax controversy, whether an audit, alleged tax deficiency, criminal accusation, or other matter, demands immediate, decisive action from skilled legal counsel.
No two tax situations are identical. Each situation — each set of facts, laws, and goals — is unique. The amount of money owed and the potential consequences change with the circumstances involved, so it is highly conducive to obtaining legal counsel. Any tax controversy, whether an audit, alleged tax deficiency, criminal accusation, or other matter, demands immediate, decisive action from skilled legal counsel. Any tax controversy, whether an audit, alleged tax deficiency, criminal accusation, or other matter, demands immediate, decisive action from skilled legal counsel.
- Installment Agreements
- offers in Compromise
- Penalty Abatements
- Reclassification of Collection Status
- Fresh Start Program
- Innocent Spouse Relief
Estate Tax
Much of your life’s legacy could be lost to estate taxes without proper planning. While a simple will can provide for the transfer of your assets to your loved ones, it does not contain special provisions for advanced estate tax planning.
The Federal Estate Tax: Exemptions & Rate
Federal estate tax law currently provides for an exemption that is adjusted annually for inflation. In 2018, the exemption is $5.6 million for an individual and $11.2 million for a married couple. This means that up to these amounts can be left to heirs without paying an estate tax. In addition, the annual gift exclusion amount has been raised to $15,000, up from $14,000.
The taxable value of the estate is calculated by adding up all the assets owned by the individual and subtracting any liabilities from that amount. Additional deductions can also be taken for qualified charitable deductions as well as administrative and legal costs related to settling the deceased’s estate.
The tax rate for estates exceeding the exemption amount is 40%. The rate is applied to the taxable estate value that is in excess of the exemption amount.
The Federal Estate Tax: Understanding Portability
In addition to the individual exemption, married couples enjoy an unlimited deduction for transfers to one another. This is beneficial for those couples who choose to leave their estate to each other. Without proper planning, however, it can result in a forfeiture of some of the individual estate tax exemptions after the passing of the second spouse.
This can occur, for example, when a husband leaves $3 million of his individually-owned assets to his surviving wife who already has $5 million herself. This would bring her total net worth to $8M. The bequest to his wife is not subject to estate taxes, however, because it qualifies for the unlimited marital deduction. After some time, the wife also passes away, leaving everything to the children. While her estate can take advantage of her individual exemption of $5.6 million, the remainder could be subject to estate taxes because her husband’s individual exemption was not utilized.
To address this issue, the current estate tax law allows for “portability” of individual exemptions between spouses. In short, estate tax portability enables the surviving spouse to utilize the unused portion of the estate tax exemption of the predeceased spouse. Portability is not automatic, however. In order to take advantage of it, an estate tax return must be filed with the IRS within 9 months of the passing of the first spouse, even if there are no taxes due at the time.
An alternative to relying on portability is to utilize a special planning tool referred to as a credit shelter trust (also referred to as a bypass or A-B trust). If properly established, such trusts work much in the same way as portability, but do not require the filing of an estate tax return after the passing of the first spouse.
Finally, it is worth noting that a number of states impose a separate estate or inheritance tax. While the rates are typically much lower than the federal rate of 40%, the exemption amounts are smaller as well.
Estate Planning for High Net Worth Individuals
Individuals and families with significant net worth might still have taxable estates even if they take full advantage of their respective exemptions. For these individuals, there are a variety of advanced planning techniques that can be utilized to help reduce the estate tax burden. These include strategic gifting plans, life insurance trusts, personal residence trusts and grantor-retained annuity trusts.
Same-Sex Couples
The U.S. Supreme Court’s ruling in 2015 recognizing marriage equality allows same-sex couples previously married under state law to take advantage of all the federal privileges afforded to traditional couples, including those related to federal gift and estate taxes.
The Bottom Line
In the end, tax planning strategies are inherently complex, which makes having the guidance of an experienced estate planning attorney invaluable. Our attorneys can help you design a plan that allows you to pass on as much of your hard-earned assets as possible to your loved ones and beneficiaries.