Some of my prior posts have references to trusts. However, I have yet to give a basic explanation of how they work. Hopefully, this post will give those without experience with trusts some basic knowledge. One key feature of a trust is the division of the benefits and burdens property ownership. For example, trusts are often used when children inherit large sums of money and someone thinks it's unwise to allow a 13 year old to immediately use the money as they deem fit.
Now that spring is here, it is time to start preparing your family camp for summer. This may lead you to get the urge to clear out some vegetation around your property. Maybe you have some trees that you think may be dying or safety hazards and you believe it’s about time to bring them down. This is not something you should do without being sure whether you need a permit. In many cases, even dead and dying trees need to be replanted and a Code Enforcement Officer should be consulted. Further, unpermitted cutting of vegetation on waterfront property can lead to civil penalties and expensive replanting projects.
When engaging in business transactions with friends, it can be very tempting to try to save the time and money involved with formalizing the arrangement. Everyone knows that lawyers are expensive. You know and trust the person you're dealing with, so why not just trust them to keep their word now? Maybe you’re worried that making a friend sign a written agreement will make them think you don't trust them. Who really wants to talk about how a deal could go wrong when you and your partner are so pumped about your great business idea? I would suggest having this conversation early is much better than skipping it and having the deal go south after you've both invested time and money. Despite your excitement about your new venture, things can, and often do, go wrong and you need a plan in place for that possibility.
Setting up, or even just updating, your estate plan will never be first on your to-do list when coming home with a new child. There are far too many things to do and there is never enough time to do them. Whenever you get a moment of downtime, you're likely going to want to spend it catching up on sleep and not thinking about the doom and gloom scenarios that make estate planning necessary for your family. The good news is estate planning does not have to be a difficult process and with a small investment of time and money you can have an estate plan that gives you peace of mind.
State and municipal governments are constantly making decisions that impact the lives of citizens. Commonly, the reasoning behind those decisions can be unclear. Further, problems with the process involved in making those decisions could weaken their validity. It is difficult to point out decision-making flaws when citizens are kept in the dark. Governments are commonly held accountable through open government laws that allow citizens to participate and remain informed. Here in Maine, we have the Freedom of Access Act (FOAA) to provide the public access to government information.
When buying or selling real estate, the transaction often requires granting an easement to provide access, either physically or to utilities like water or electricity. Briefly, an easement is the right of one property owner to use another's property for a specific purpose. Commonly, easements are in the form of a right of way that allows the owners of a neighboring lot to pass over another’s land to access their own. An easement could also allow placement of a well or access to a public water supply. Alternatively, a negative easement could provide that the owner of a lot will actually refrain from using his or her property in certain ways. For example, a view easement could limit the height of any buildings to protect the easement holder's views.
Way back in June I briefly discussed some of the challenges that come with owning real estate jointly with others. At that time I suggested that a Limited Liability Company (LLC) may be a useful tool to limit conflicts from arising. In this post, I hope to go a little more in depth on why this is the case.
Since 1926 when the U.S. Supreme Court held that local governments had valid interests to enact zoning regulations, zoning has been a central part of land use regulation by municipalities. Zoning ordinances have provided governments with the tools to manage the growth and development of their communities.
You have just moved into your dream house in what you believe to be the perfect community. Everything is great for a while. A few years later you receive a notice about a development being proposed in your community. Maybe it’s just a project that you think will greatly impact your life in the community. Maybe it’s a proposal to build a strip mall next to your home. Now you have a choice to make. Do you just sit back and hope the town planning board does, what you think is, the right thing? Do you chain yourself to a tree? Do you try to stop or, at least, alter the project by getting involved in the approval process? I would suggest that getting involved is your best bet.
There are few things as stressful as having large amounts of tax debt. It can often be the case that the IRS is seeking more money than a taxpayer made to begin with. When businesses and individual taxpayers keep poor records of their financial information it can be difficult to refute the amounts IRS claim you owe. The stress is often made worse because the IRS, being a federal agency, has the ability to follow you and collect unlike other creditors.
"It's my property, I can do what I want" is a common statement made by some landowners. With the increase in land use regulation and zoning, it has increasingly become a falsehood. Land use regulations greatly impact how real property is used and can often prohibit seemingly harmless actions. For example, some Portland landowners are facing enforcement actions for renting out their property on Airbnb.com.
It's been a while since something substantive has been posted here. I have not given up on blogging like many others have before me. On June 15th my wife, Becca, gave birth to our first son Arthur. Everyone is healthy and doing great. Let's just say this new arrival has made writing about the business forms, tax code, or anything for that matter seem a great deal less interesting.
I was going to use this as an opportunity to discuss why you should think about estate planning once you have children no matter how old you are. Alas, I'll have to add that to the list of things to talk about later.
It would be impossible to fully explain the intricacies of the various federal business tax regimes in a blog post. I can assure you, nobody wants to read that. However, I will attempt to briefly introduce some keep pieces of the following business tax regimes:
- Sole Proprietor (Schedule C of an individual return)
- C Corporation (Subchapter C - Form 1120)
- S Corporation (Subchapter S - Form 1120s)
- Partnership (Subchapter K - Form 1065)
When starting a new business several considerations need to be taken into account when deciding what form of business entity, if any, will be used to conduct that business. Every business has it's own unique circumstances, however, there are two major benefits that can come with forming a business entity. First, entities formed pursuant to a state statute give owners the benefit of "liability protection." Second, there is a great potential for tax savings coming in the form of a reduction of self employment taxes.
The family camp is an important piece of many Maine families. However, the family camp experience is not limited to just campfires, swimming and relaxing. There are a wide variety of legal issues that can come with owning a piece of real estate with others. Two major issues will almost be guaranteed to come up at one time or another. First, who is going to be responsible for the burdens of ownership? Second, how are the benefits of owning a family camp going to be divided? Often these issues need to be considered while hoping to follow the wishes of the past generation that hoped to keep the property in the family for years to come.