Founding Partner, Chase Morinaka, was named to Super Lawyers®' Rising Stars List for the Second Straight Year!
When you open a bank account, your banker will probably ask whether you want to designate someone as a payable-on-death (POD) or transfer-on-death (TOD) beneficiary. These designations mean that when you die, all of the money in your account will be split equally among the specified beneficiaries. As you can imagine, POD and TOD beneficiary designations can be useful estate planning tools.
But what happens if your payable on death and transfer on death beneficiaries do not outlive you?
For one, unless the account paperwork clearly says otherwise, in order to receive their share of your accounts, your payable on death beneficiaries must outlive you. If they don’t, the POD beneficiary designation doesn’t transfer anything to your beneficiaries’ estates.
Let’s say your two children are your payable on death beneficiaries, then when you die, your two kids split the money in your account. However, if one of them passes away before you do, the remaining child will receive all the money in that bank account. This is probably fine in most cases, but what if you had young grand kids from the child that passed away? Your child who did not have grand kids would receive everything in the payable on death account and your grand kids who may need the financial help are left with nothing. Most people prefer half the money in the account to go to their remaining child and the other half to be split among their grand kids from their deceased child. This is just one example when having your children as payable on death beneficiaries might not be the wisest choice. Using a Will and the Probate process or a Trust might be a better option.
Preparing your Last Will and Testament, Revocable Living Trust, and other estate planning documents takes thought and experience. Call our office to set up an appointment with an experienced estate planning lawyer.
In any new business or in any new industry it is easy to get excited and emotionally attached to the idea of striking it rich. Here is a story I see on a fairly regular basis, especially when it comes to small businesses in new and emerging industries (e.g. Cannabis):
You are looking to invest into a new industry. Maybe you met someone through a friend, or at a seminar or industry gathering, and they present you with a business plan. You are presented with an offer: you put money into the business and this other person will do the work and get it off the ground. “It’s a great investment.” “There has never been an opportunity like this.” “Let’s get you retired.” Words and phrases like this are what you will probably hear.
Some months pass and your investment has shown no return. In fact, you have been asked to invest even more. This makes you stop and think. Did you take all the proper precautions before you turned over your money? A lot of people believe they did what they thought they were supposed to do. They made sure the business was actually filed with the State. They read and signed a partnership or operating agreement, often drafted by this someone else’s lawyer (generally not designed to protect them). Then, they saw a few tasks finished. The business license was filed. The facebook page was created. A lease was even signed. There was just enough accomplished to make an investor feel satisfied.
Now, the money has run out. You have been asked to invest more and told that things are close. “It’s going to work. It is only a matter of time.” Of course, while the business is getting off the ground, the one responsible for doing the work has been drawing a salary. At first it seemed fair, you were told it would take about 3 to 6 months to get this project off the ground. 1 year later, progress has stalled. You realize you do not really know what this person has been doing for months other than taking a salary from your money. At this point, most people tell me they feel like they just got robbed.
As a lawyer I have to tell people all the time that, unfortunately, it is very difficult to prove this person did anything wrong and it is very expensive to even try.
We do not want this to be your story. There are many ways to keep this from happening, but you will have to be diligent on making sure there is accountability throughout the entire business process. The most important thing you can do is maintain control of your investment, in other words, the money. Using a well-thought partnership agreement and practical solutions to control the bank accounts. For example, something as simple as requiring two signatures on a check can end up saving you valuable time and money. This, and other precautions need to be taken long before any money exchanges hands.
This is the value of your business lawyer. You should work with one before you put anyone else in control of your money.
Selling the family farm to pay the estate tax is a rare indeed, but it takes planning to minimize the tax burden on your family and make the transition as smooth as possible.
Anytime you deal with confidential or private information (Social security numbers, unlisted telephone numbers, health information, etc) you need to take steps to keep such information confidential. Some types of information, if released without the owner's consent carry legal penalties. If confidential information is also released without consent and then used for improper purposes like identity theft, the information owner may seek compensation from the organization that gave out the information.
The disclosures you see at the bottoms of emails to you are attempts to reduce the likelihood of improper use of information. They also provide the organization that sent it out with an argument that it did everything they could to stop any improper use.
Although no lawyer can guarantee that type of disclaimer will have any actual legal defense value, it does make the clients/information owners feel better when they see it on emails. I recommend adding an email disclaimer to your email signature line.
If your business does take confidential information like credit card numbers, SSNs, or anything else that you think should be private and save the information in an electronic form or if you transfer paper forms by electronic means, you should consider having a company information and retention policy drafted. Well written policies give lawyers arguments if anything ever did happen and former clients were looking at your company for accidentally releasing certain types of information.
Have you ever wondered what your Estate Tax Liability is in Oregon? This table shows the estate transfer tax rate for 2015.
If these rates seem high, you should know there are many ways to lower your tax liability, leaving more of your hard-earned money for your family and loved ones. If you would like to know more about lowering your tax liability, please call my office to schedule an appointment.
Chase Morinaka practices law in Portland, Oregon with a focus on Small Business Law, General Litigation, Personal Injury, Estate Planning, and Elder Law.