Some people contemplate setting up a trust when they reach or are near retirement age. The process can be quite complex, though. You will also need to decide between a revocable trust and an irrevocable trust. You would be wise to involve a probate lawyer if you aren’t clear about the difference.

Revocable Trust and Irrevocable Trust Explained

With a revocable trust, you have the flexibility to make changes at any time. This includes transferring property and assets, undoing a transfer, or terminating the trust altogether. A revocable trust, though, does become irrevocable in the event that you die or are no longer able to competently make your own decisions.

An irrevocable trust is the opposite. This means once the trust is established and signed, you relinquish all control. Changes can only be made with the permission of the trustee and the beneficiary. [Read more…]

Do you own a vacation home in the Lynnwood area? As with any other property you own, you have to pay taxes on it. Fortunately, the IRS may vacation home tax deductions, depending on how you use the secondary dwelling. Our real estate agents know the best practices for keeping taxes to a minimum.

Vacation Home Tax Deductions—Best Practices

You can reduce mortgage interest and real estate tax on a vacation home, just as you can for your primary residence. How are you using the vacation home? If you rent out the home, as most people do, then limit the rental days to no more than 14 days. This allows you to pocket the full rental income without having to pay rental income tax. This holds regardless of how much you’re charging the tenant.

The IRS may also classify your home as “dual-use” property if you use the home yourself AND rent it out. However, the home is considered rental property if the total number of personal use days does not exceed 14 days, or one day for every 10 days of rental —whichever is greater. [Read more…]

Starting a business? We recommend getting in touch with a business law attorney. Among other decisions, you will need to decide between forming a C-corporation or an S-corporation. We will explain the difference and the pros and cons of each.

C-Corporation and S-Corporation at a Glance

Startups generally choose if they want an LLC (limited liability company), C-corporation, or S-corporation for a business structure. Under an LLC model, members of the company cannot be held liable for the business’ liabilities and debts. This post, though, will focus on the C and S-corporation structure. The difference comes down to these three areas: taxation, ownership, and shareholders. [Read more…]

All home purchases financed by a mortgage require an appraisal. It’s not unusual, however, for the home’s valuation to be lower than the price you and the buyer agreed upon. This puts both parties in a predicament. Sellers have several options in the event of a low mortgage appraisal. Our real estate planners will go over the possible courses of action.

Solutions for a Low Mortgage Appraisal

1. Sell at the Appraised Value

You can always agree to sell the home at the appraised value. This is good news for the buyer. For you, the seller, this means leaving money on the table.

2. Have the Buyer Pay the Difference

The buyer may agree to pay the difference if the difference between the appraised value and original selling price is miniscule. If the buyer really wants to close the deal in spite of the lower-than-anticipated appraisal, then he/she may be willing to make up the difference.

3. Find a Middle Ground

Both parties may agree to split the difference. If the original selling price and appraised value differ by $20,000, for example, then the seller may agree to bring the selling price down by $10,000, while the buyer pays the remaining $10,000. [Read more…]

It’s understandable that employers would want to monitor their employees. To increase productivity, you want to be sure your staff is where they’re supposed to be. You want to know they’re not slacking off in the breakroom or janitor’s closet. This does, however, raise some legal questions regarding what kind of workplace monitoring is considered legal. This is an area our business law team tackles on a regular basis for Lynnwood business owners.

The Legality of Workplace Monitoring

There are currently no laws in place that directly address employee privacy rights. This gives employers considerable leeway. In essence, monitoring employees is considered a business operation much like handling customer service or overseeing supply line productivity.

According to National Workrights Institute president Lewis Maltby, just about any type of monitoring is allowed, as long as it doesn’t involve the restroom. [Read more…]

Most businesses here in Lynnwood don’t actually own the building they’re operating out of. Most shop buildings are rented much the same way tenants rent out an apartment. There are, however, circumstances in which business owners may want to terminate a commercial lease early. How can they do this without being in breach of contract? Our business law firm has a few ideas.

Review Your Clause

Go over your contract and look for a bailout or co-tenancy clause.

Bailout Clause: This allows you to terminate your contract if revenue does not meet a pre-established threshold.

Co-Tenancy Clause: This enables you to terminate the contract if another commercial tenant leaves. This may adversely affect your own business due to sharing the same customers with the other tenant. [Read more…]

Most people are familiar with the implications of filing for bankruptcy. However, “debt settlement” is a helpful but lesser known option. It’s important that you understand all of your options if you’re having difficulty paying off what you owe to your creditors. Bankruptcy and debt settlement are both solutions that you should explore with an attorney.

Bankruptcy and Debt Settlement at a Glance

Bankruptcy falls under two categories: chapter 7 and chapter 13

Chapter 7: when you file for chapter 7, debt (such as credit card bills, medical bills, and loans) is wiped out regardless of how much you owe. Of course, this will adversely impact your credit rating. You may also have to give up a portion of your assets as a trade-off. Chapter 7 is normally settled within six to nine months.

Chapter 13: With chapter 13, you agree to pay back a portion or all of your debts. The upside, though, is that you retain your assets. Chapter 13 does take longer to resolve, usually lasting three to five years. [Read more…]

In a perfect world, you wouldn’t owe a dime to lenders, creditors, or the IRS. However, the reality is something entirely different. The average U.S. household with credit card debt carries a balance of $16,061. Since we’re on this subject, we thought we might explain a thing or two about the difference between secured and unsecured debts.

Secured Debt

Secured debts are tied to assets that are considered collateral. Lenders place a lien on an asset, such as a car, a piece of land, or another possession. This gives them the legal right to claim the asset if you’re unable to pay back what you owe. Mortgage loans and auto loans are both examples of secured debts. In fact, the house or car you’re borrowing money for is usually the asset that becomes collateral. [Read more…]

An advisory board usually consists of consultants outside the company that make professional recommendations on the company’s behalf. These can be technology, HR, finance, and other field-specific experts. The benefits of an advisory board are numerous. We recommend that Lynnwood enterprises assemble their own board members to help with their critical decision making process.

Advisory Board Benefits

With an advisory board comes an outside perspective and diversity of opinion. Members bring their knowledge to the table and discuss the company’s performance and future outlook from a totally objective view. An advisory board also brings strategy development and business development opportunities.

Naturally, some people may be reluctant to make decisions based on consultation from outsiders. Keep in mind, though, that an advisory board only gives advice, support, and recommendations. All final decisions are left to you and your internal team; board members have no formal authority. [Read more…]