Business owners should be careful when making loans to a company

If you own a business and you plan to loan money to the company, consult an attorney such as Slusser Law Firm in Hazleton, Pa., about the paperwork. Otherwise, the IRS could claim the money wasn’t a loan after all, and come after you for additional taxes.

Fred Blodgett found this out the hard way. Blodgett owned a small company (an S corporation) that sold architectural glass blocks. When the real estate downturn hit, he supported the company by transferring money to it from a family trust. He called this a loan. In subsequent years, the company paid him about $60,000, which he called a loan repayment.

Not so fast, the IRS said. According to the IRS, the “loan” wasn’t a loan at all, but a simple contribution of capital. And the “repayment” was actually just ordinary wages for the manager of the business. Therefore, the IRS claimed, the company owed more than $13,000 in employment taxes and penalties.

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Supreme Court reminder: Update your beneficiary designations

One of the most important things people can do after a major life event – a marriage, a divorce, a new baby, etc. – is to update their beneficiary designations, and indicate who should get the assets in various accounts if they should unexpectedly pass away.

A new decision from the U.S. Supreme Court makes this very clear, and shows what can go wrong when people forget.

Beneficiary designations apply to pensions, 401(k) plans, life insurance policies, brokerage accounts, IRAs, bank accounts and more. Keeping them updated is a critical part of financial and estate planning.

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Product makers may be liable for injuries, regardless of ‘fault’

Product-makers-may-be-liable-for-injuries-regardless-of-faultGenerally, in order to hold someone liable in court for an injury, you have to show that they were careless or irresponsible in some way. If somebody ran a red light and hit you, that might not be hard to prove. But if a complex piece of machinery fails, it might be difficult to say exactly what went wrong, or what should have been done differently.

Fortunately, the court system recognizes this problem, and has made it easier for injured people to be compensated in many cases.

For instance, a man in Maine suffered severe abdominal pain after eating a hot turkey sandwich at a truck stop. Doctors discovered a small perforation of his esophagus, and evidence that it was caused by a turkey bone. The man sued the manufacturer of the turkey product in the sandwich, which was supposed to be “boneless.”

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Young families also benefit from having estate planning

Young-families-also-benefit-from-having-estate-planningKen and Judy are a couple in their 30s. They recently bought a home, and they have a small child. But apart from some home equity, a retirement account at work and a life insurance policy, they don’t have a lot of assets or investments. Do they really need estate planning? Can’t they get by with a simple will from the Internet?

The truth is, even a couple like Ken and Judy can benefit from a good estate plan, and it doesn’t have to cost them an arm and a leg.

Leaving aside the many serious errors that are commonly found in “form” wills in books and on the Internet, Ken and Judy should consider setting up a living trust.

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‘Do-it-yourself’ divorce is generally a bad idea

Do-it-yourself-divorce-is-generally-a-bad-ideaRecently, a number of companies have been trying to persuade people that they can save money by handling their divorce on their own. These companies sell packets of generic forms in books or on the Internet, claiming that they were developed by “expert” attorneys and that they’re all you need.

Buyer beware! While these forms might be accepted by a divorce court, they’re not tailored to your specific situation, and the companies do not provide legal advice to protect you.

If you know someone who’s thinking of a “do-it-yourself” divorce, ask them these questions:

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The Slusser Law Firm
1620 N. Church Street, Suite 1
Hazleton, PA 18202

1515 Market St
Suite 4056
Philadelphia, PA 19102

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