Hyden, Miron & Foster, PLLC Law Blog

Wednesday, September 21, 2016

Enjoy Your Retirement Years by Lowering Your Taxes


What steps can I take to reduce my taxes during retirement?

You likely have a lot of plans for your first few years of retirement.  You may want to travel, take up a new hobby, or simply enjoy your new free time.  In addition to pursuing your passions, you should consider taking the time to follow some important steps that could potentially lower your tax bill for the remainder of your life. 

During the first few years of retirement, as you stop receiving a paycheck and start living off other funds, such as a pension or investments, your income will likely drop to a lower bracket. This means you will pay a lower


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Sunday, August 28, 2016

Don’t Get Caught in the Next Panama Papers Scandal


Earlier this year, private data from the Panamanian law firm of Mossack Fonseca was released to the International Consortium of Investigative Journalists via an anonymous informant. This data revealed the firm had helped many politicians and business leaders from around the world set up shell companies and off shore accounts in tax havens.

The impact of the release of what are now known as the “Panama papers” has been widespread. 12 current or former heads of state have been linked to secret offshore accounts. Icelandic Prime Minister Sigmundur Gunnlaugsson was actually forced to resign after his accounts were revealed to the public.


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Wednesday, August 10, 2016

Tax Tips for Freelancers and “Gig” Workers


What tax deductions can I take as a freelance employee?

Millions of Americans today are self-employed, engaging in freelance or so-called “gig” work.  Our economy has been termed a “gig economy” because so many Americans are working multiple short-term jobs or single projects, often connected to their employers through websites and mobile applications.  Freelancers typically receive a 1099 form that summarizes their earned income.  According to the IRS, there were over 91 million 1099 forms issued across the country last year, the highest number on record. 

Filing taxes as a freelancer can be complicated as you may be dealing with numerous 1099 forms and likely have questions about deductions.


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Tuesday, August 9, 2016

It’s Not Like You See on TV


In pretty much every sitcom ever made, there is an episode where one of the main characters inherits some strange object after the will of a deceased relative or friend is publicly read. The concept is so ingrained in pop culture that most people are shocked to find out that such things hardly ever happen in real life. 

Most people simply do not leave directions about what to do with specific objects in their wills. And one of the main reasons why, is that their lawyers tell them not to.

Why Putting Lots of Specific Instructions in Your Will Is Generally a Bad Idea

The main reason it is a bad idea to list a bunch of items in your will is that it makes the will weaker.


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Tuesday, July 19, 2016

State Taxes & How They Affect You


A big part of estate planning requires the anticipation of various taxes.   Taxes can range from personal income tax, estate taxes, use tax, and the like.  For example, if you inherit a decedent’s property, you will likely need to pay inheritance taxes to the state.  However, estate taxes are generally removed from the actual estate of the decedent. 

You should also remain aware of your state’s tax laws that may affect you.


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Tuesday, July 19, 2016

Wedding Season = Estate Planning Season?


Wedding Season = Estate Planning Season?

You’ve booked a venue and a DJ for the reception, ordered the flowers, and picked out a cake, but there is probably one critical thing you haven’t even added to your wedding to-do list: met with an attorney about your estate plan. You don’t have to say it, we know what you are thinking, “Why in the world would I want to think about death on my wedding day!?”

Well, to be honest, you probably don’t want to be thinking about death on your wedding day, but you should be thinking about it shortly after the big day. When you pledge to love your spouse until death do you part, and sign that marriage certificate, you are linking your lives together - emotionally, perhaps religiously, and even though most people don’t think about this part, legally. In the eyes of the law, the minute you say “I do,” several things happen.

First, if you are taking your spouse’s last name as your own, or adding it to your name with a hyphen, that happens right then.
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Monday, June 27, 2016

STATE AND FEDERAL TAXES—WHAT IS YOUR LIABILITY?


Are your assets taxed pursuant to the Arkansas Constitution?  Liability for personal income tax depends on your tax bracket, which is determined by your income.  This can seem complicated if there are several tax brackets in your state, as in Arkansas.  You may qualify for an annual personal exemption for any taxes on your income.  This is important because your taxable income may be lowered under the state or federal tax schemes.


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Thursday, June 16, 2016

How to Avoid Redstone Estate Mistakes


What went wrong with Redstone's estate planning?

One would assume that ailing media tycoon Sumner Redstone's estate, estimated to be over $5 billion, would be as perfectly managed as any in the world, but one would be wrong. Redstone, who just turned 93 and suffers from dementia has ended up with a chaotic situation no one envies. Many lawsuits swirl around him and embarrassing details about his sex life and cognitive loss have been released to the press. Although a recent lawsuit brought against him by Manuela Herzer, one of his more recent romantic partners, was dismissed last month, the damage to his reputation had already been done.

Now, his estranged daughter, Shari Redstone, is embroiled in a battle with Philippe Dauman, the apparent heir to Redstone's throne.


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Monday, May 16, 2016

Estate Tax Planning: Year-End Gift Giving


What is a taxable gift for estate planning purposes?

Many individuals can take advantage of year-end gift giving as a means of transferring wealth to their beneficiaries while minimizing the potential estate tax that might be due upon their death. A gift is any transfer for which nothing, or less than fair market value, is received in return; and a variety of gifts are not taxable.  Currently, an estate that has a value up to $5.45 million is exempt from Federal estate taxes ($10.9 million for married couples), and there is no Arkansas estate tax.


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Thursday, March 31, 2016

Building a Better 401(k) Plan

What can my business do to enhance its 401(k) plan?

Today, employees no longer rely on traditional pension plans for their retirement because defined contribution plans like 401(k) and 403(b) plans have replaced guaranteed retirement income, or defined benefit, plans. Defined contribution plans, however, were not designed to be the only source of retirement funding and many plan sponsors are concerned that their employees will not have enough money saved.

Some observers believe it is time to upgrade defined contribution plans so that they function more like defined benefit plans. That being said, most employers believe the onus is on the employees to contribute more to their plans, without considering the possibility of enhancing the employer-sponsored match. What these employers fail to consider, however, is that employees will invariably decide to work longer which will lead to higher healthcare costs. This, in turn, will have a negative impact on the business.

Keys for a Good Defined Contribution Plan

There are a number of ways for a plan sponsor to provide maximum value to a 401(k) plan including:

  • Employer Match -- Increasing the amount employers are willing to contribute may encourage employees to save more
  • First Day Eligibility--The majority of plans now allow workers to begin making pre-tax contributions immediately which can ensure that employees do not fall behind in saving
  • Immediate Vesting -- Top-rated plans offer immediate vesting of employer contributions
  • Fees - Administrative fees for recordkeeping, accounting, marketing and investor education should be stated in a dollar amount in the statement and kept low
  • Investment Options -- Plan participants should have a range of investments to choose from, including mutual funds, asset allocation funds, and target date funds
  • Automatic Enrollment  -- The majority of plans offer automatic enrollment, unless employees opt out, which optimizes participation rates
  • Access to Financial Experts - Because many employees do not have investment knowledge, they should be provided with investment advisory services

Ultimately, plan sponsors need to evaluate their plans in relation to the plan participants with an eye on total plan costs, company generosity, salary deferrals and account balances and encourage participants to maximize their contributions. If you are a business owner looking to establish a defined contribution plan, you should consult with a qualified business attorney with expertise in retirement plans.


Friday, March 18, 2016

End-of-Life Medical Decisions as Part of Estate Planning

What is the difference between a medical directive and a DNR?

Sometimes the most difficult part of estate planning is making decisions about how you want to be treated at the end of your life. Though we all know we are mortal, these decisions force us to confront some unpleasant possibilities. Still, making end-of-life decisions can provide reassurance, giving you the peace of mind that comes from knowing your wishes will be followed when you can no longer make yourself heard.

What is a Living Will?

A living will is an important part of estate planning. Since most of us do not die "peacefully in our sleep" without prior illness or injury, we need to make arrangements regarding precisely which types of medical care we wish to receive when we are seriously ill and approaching the inevitable.

If a person is terminally ill, death is expected to occur within a relatively short period of time. In such situations, providing medical care will simply prolong the dying process, not help to provide any kind of quality of extended life. In such cases, individuals have the prerogative to refuse medical care that would artificially prolong their lives.

There is an essential difference, however between medical care that would force the body to stay technically alive, and palliative care that will keep the patient as comfortable as possible during the dying process. Most people, no matter what their feelings about futilely extending life, opt for palliative care to keep them as pain-free as possible at the end of their lives.

What is a DNR?

A DNR, or do not resuscitate order, is a legal document designed to keep a dying patient from being resuscitated if he or she goes into cardiac arrest or stops breathing. It is basically an agreement between the patient and the medical establishment (doctor, hospital, nursing facility or hospice) stating that the patient does not wish to receive cardiopulmonary resuscitation (CPR) or advanced cardiac life support (ACLS) if their body goes through a sudden life-threatening event.

The major difference between a living will and a DNR is that the former is a legally binding document that the person signs, frequently during the estate planning process, and the DNR is a medical order.

Procedures Denied by a DNR

With a DNR document in place, patients will not receive: chest compressions, ventilation, defibrillation, endotracheal intubation, or medications to revitalize them. Relief of choking caused by a foreign body is typically an exception, since it is creating a painful, terrifying situation for the patient. Treatment is also given for painful breathing, injuries and hemorrhage. The rationale is that the patient does not want his or her life prolonged, but is not consenting to a tortured ending.

The Choice Is Yours

Though it is unpleasant to contemplate your own death, it is gratifying to be able to make advance decisions about one's own future care.  Contacting a qualified estate planning attorney is a good first step toward self-determination, not only in how your assets are distributed, but in how you are medically treated at the end of your life. Remember that the choice is yours. If you want your life extended under any circumstances, you certainly have the right to make this clear in your estate plan.


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