Monday, August 22, 2016

AFR's for September

The AFRs Annual Semi-annual Quarterly Monthly
are as follows
Short-term 0.79% 0.79% 0.79% 0.79%
Mid-term 1.22% 1.22% 1.22% 1.22%
Long-term 1.90% 1.89% 1.89% 1.88%

Tuesday, August 9, 2016

Nevada's new Commerce Tax

You may have recently received a “Welcome Letter” from the Nevada Department of Taxation notifying you of the newly enacted Commerce Tax laws.

The Commerce Tax is a new tax levied annually on each business entity that (1) does business in Nevada, and (2) earned gross revenue in Nevada for the fiscal year that exceeds $4,000,000. However, even exempt entities or business entities whose gross revenues in a fiscal year do not exceed $4,000,000, will be required to take certain actions before the August 15th deadline.

Exempt entities must file the Exempt Status Entity Form using the Tax ID number provided in the Welcome Letter. You can submit the Exempt Status Entity Form to the Department of Taxation by mail or through the Nevada Tax Center system. After submitting the Exempt Status Entity Form, your exempt entity will be in compliance with the Commerce Tax laws and will be removed from further Commerce Tax related mailings.

The list of entities exempt from the Commerce Tax is limited to:    

 Natural person, unless such person is engaged in a business and files Schedule C, E (Part 1) or F with the federal tax return;
 Governmental entity
 Non-profit organization pursuant to section 501(c) of the Internal Revenue Code;
 Business entity organized pursuant to NRS 82 or NRS 84;
 Credit union
 Grantor trust, excluding a trust taxable as a business entity for federal tax purposes;
 Estate of a natural person, excluding an estate taxable as a business entity for federal tax purposes;
 Certain REITs – Real Estate Investment Trusts
 REMIC – Real Estate Mortgage Investment Conduit
 Passive Entity*
 Entity, which only owns and manages intangible investments, such as stocks, bonds, patents, trademarks
 Participant in an exhibition NOT required to obtain state business license (NRS 360.780)
 Any person or entity which is prohibited from taxing pursuant to Constitution or law

Our office has been assisting many of our clients with this newly adopted Commerce Tax. If you have questions regarding how to file, or if you are exempt or non-exempt, we suggest contacting your attorney, accountant or calling the Department of Taxation.

Attorney Jason C. Walker

Friday, August 5, 2016

LLC Operating Agreements

Even single member LLC’s should have operating agreements.  The importance of an operating agreement seems obvious when unrelated parties are partners in an LLC; but the need seems less apparent when there is one member or if the member of the LLC is a husband and wife or a joint trust.  Having an operating agreement is a tangible item that demonstrates the intent that the LLC be treated as a legitimate business.  A creditor attempting to pierce, or reverse pierce, the veil of the LLC is likely to use the lack of an operating agreement to try to prevail in litigation.

The operating agreement should also be updated from time to time to reflect changes in ownership or management.  For instance, in estate planning matters we often have clients assign their ownership of their LLC to a revocable trust or a Nevada On-Shore Trust (domestic asset protection trust). The resulting change in ownership or a change in the named manager should be updated in the operating agreement with an amendment to the operating agreement or a restatement of the operating agreement. 

Attorney Jason C. Walker

Wednesday, July 20, 2016

Determining The Validity Of Your Will During Your Lifetime

One of the common fears of clients when doing their estate planning is that the terms of their last will and testament and/or their revocable trust will not be followed after their death.  In this regard, there are a limited number of legal theories to challenge the validity of a will or trust of a decedent.  The two most common legal theories are: (1) the decedent lacked the necessary legal capacity at the time the will (testamentary capacity) or trust (contractual capacity) was created, and (2) the decedent was unduly influenced by someone at the time the will or trust was created. 

When a will or trust is so challenged, one of the main problems is that the person who made the will or created the trust is now deceased.  The maker of the will or trust is no longer available to confirm that these are their intentions, that they have the necessary legal capacity, that they are not being unduly influenced, and if necessary explain to the court or jury the reasons for the terms of their will and trust such as why a child is disinherited.  This unavailability of the maker of the will or trust may lead to speculation on the part of the judge or jurors, and the substitution of their judgment of what they believe the will or trust should provide such as a child should not be disinherited.  At least as to wills, there is now a solution to this problem in Nevada.

For many years under Nevada law, the maker of a will, trust or other writing constituting a testamentary instrument could have a court determine any question of validity arising under the instrument and issue a declaration of rights. In other words, a Nevada court could issue a declaratory judgment as to the validity of a will or trust. Specifically, the law is Nevada Revised Statute 30.40(2). However, until recently this statute has been construed to mean that such a determination and declaratory judgment of the validity of a testamentary instrument by a court could not take place until after the death of the maker. This has now changed as to wills. The 2015 Nevada legislature passed a law that states if a declaratory judgment is entered under Nevada Revised Statute 30.40(2) during the lifetime of a decedent declaring a document to be the valid will of the decedent, the validity of that will is not subject to challenge after the death of the decedent. Of important note is this does not prevent the person from later revoking the will or making a new will during their lifetime.

However, of particular concern is that the Legislature did not include trusts in the new law.  This is most unfortunate in that revocable trusts are the primary estate planning tool in this day and age as opposed to wills.  One saving grace may be that in most instances the will is executed the same day as the trust.  Accordingly, a determination by the court during the lifetime of the maker that a will is valid should at least indirectly assist in later establishing the validity of a trust that was signed on the same day as the will was signed by the now deceased maker.  A potential problem is that a trust may be amended or restated after the date the will is signed.  Hopefully, a similar law for determining the validity of trusts during the lifetime of the trustor will be enacted in the next session of the Nevada Legislature. 

Tuesday, July 19, 2016

AFR's for August

August AFRs Annual Semi-annual Quarterly Monthly
are as follows
Short-term 0.56% 0.56% 0.56% 0.56%
Mid-term 1.18% 1.18% 1.18% 1.18%
Long-term 1.90% 1.89% 1.89% 1.88%
The Section 7520 rate is 1.4%

Wednesday, June 29, 2016

Melina Barr-Nicolatus Celebrating 30 Years with Jeffrey Burr

Longevity says a lot about a firm.  Longevity of its employees in particular.  We have several long-term employees, but our longest running employee is Melina, who is celebrating 30 years with Jeffrey Burr this June!  Melina Barr-Nicolatus started with Jeffrey Burr as a paralegal in June of 1986 and has been a support beam of this firm ever since.

We wish Melina a very Happy 30th Anniversary with Jeffrey Burr Ltd.  Here's to many more years.

Friday, June 24, 2016

The Power of Sentimental Value

Sentimental value can sometimes be worth more than economic value. Having represented family members fighting over family mementos worth little or nothing money-wise, we have come to realize the power of sentimental value.

Nevada, like many other states, allows a person to dispose of his/her tangible personal property by a written list referenced in the person’s will or trust. These lists allow a person to designate individual recipients of certain pieces of tangible personal property. The person can change the list as many times as he/she wants during his/her life. However, we oftentimes find the lists are never completed. In some cases the result is family dissension – often over the most unassuming items.

Sometimes the cure to the potential family discord is simply completing the tangible personal property list that accompanies most wills and trusts. If you have promised a certain piece of tangible personal property to someone and you still wish to leave that property to that person, complete your tangible personal property list accordingly. This can facilitate the administration of your estate or trust when you die and hopefully prevent frivolous lawsuits that consume potential inheritances.

For more information about the tangible personal property list, contact the attorneys at Jeffrey Burr, Ltd.