Why You Should Not Put Property In Your Child’s Name As Part Of An Estate Plan
A good portion of parents with children eventually want to pass on the property they own to their children. Some might think that it is a good idea to put their real estate, home, property, or land in the name of their children while they are still alive. This type of estate plan can be easy to set up and can most likely be done without a lawyer, but it is full of dangers and risks that can pop up and bite you if you are not careful.
Titling your property with a child jointly or what is called in most states joint tenants with right of survivor-ship is an easy way to pass on property to that child. When you die, the property automatically passes to that child without having to go through the probate process. The title must simply be changed from joint ownership to that child’s name after you die and the title will then be in that child’s name. There are numerous reasons why doing this could be a bad idea though. One of the most common reasons that joint ownership with a child may be dangerous is that the child has an ownership interest in the property before you die and this interest could be subject to divorce proceedings, the IRS, or other creditors that your child may have. Your ex son or daughter in law or your child’s creditor can assert their interest in your property while you are still alive because the property is in your child’s name. Your child could be entitled to force you to sell your house if they feel that you are unable to care for yourself anymore and would be able to share the proceeds. Your child could also move their family in with you and become permanent guests.
Start Out The New Year By Filing For Bankruptcy
As we usher in 2012, the bad financial decisions we made in 2011 will quickly become a lingering memory. Looking back to New Year’s one year ago, I remember all the talk of how people were going to get out of debt for their New Year’s resolution. One year later, it seems nothing has changed and according to the statistics Americans are going the wrong way. Credit card debt is now at an alarming $15,799 per American. With only 300 million people living in the United States it blows me away to learn that there are over 609 million credit cards held by US consumers. Considering age and ability to pay this would factor down to six credit cards being held per American. Over the last years, all the talk about getting the US debt under control and the US consumers, that control just went out the window. With these new numbers it’s obvious that the US is going to see record numbers of Americans filing for bankruptcy. Since the changes to the bankruptcy code back in 2005, at first we saw a drop as expected and from 2006 on the numbers of those filing bankruptcy has continuously risen until 2011 where it went flat. This last year has perplexed many experts because the numbers say bankruptcy filing and yet we will probably finish out the year with 1.5 million bankruptcies filed, a little lower than 2010.
Independent Contractor or Employee? Know the Financial Rules
Knowing the law is critical for employers when determining employment status. Today many companies and workers prefer contract employment to permanent, traditional employment. While this system has advantages for both employers and workers, it also opens the door for potential abuses. This can cause conflict on both sides. Understanding the rules upfront can save valuable resources including time and money.
There are three areas of criteria to consider when determining whether a worker is an independent contractor or an employee. The three areas are 1) Financial, 2) Behavioral, and 3) Type of Relationship. While these criteria provide guidelines, it is important to evaluate each situation and ensure that each worker’s status is appropriate for the work performed. Here we will take a look at the financial factors to consider when evaluating a worker’s classification.
Financial control refers to facts that show whether the business has the right to control the economic aspects of the worker’s job. Asking the right questions about financial control can help in differentiating between contractors and employees. Contractors and employers should ask: Has there been a significant investment by the worker? There are no exact amounts that determine significant investment, but a contractor often invests in equipment and supplies. However, some occupations, such as construction, require workers to spend thousands of dollars on equipment and still classify them as employees.
Expense reimbursement is another factor that helps determine contractor versus employee status. Contractors are more likely to have unreimbursed expenses than employees. Ongoing costs that are fixed and are incurred whether work is currently being performed or not, are especially important. However some regular employees have unreimbursed costs.