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Whether you are married or not, if you are involved in a committed partnership with another individual, estate planning is about so much more than planning for death—it’s about planning for life and ensuring your beloved will be protected and provided for no matter what happens to you. And if you are a member of the LGBTQ+ community, estate planning is even more critical, especially if you have complex family relationships.

Although same-gender marriage is legally recognized in all 50 states, long-held prejudice at both the political and family level continues to create complications for both married and unmarried same-gender couples. Indeed, while the federal government recognizes same-gender marriage, there are plenty of cities, businesses, and people who still refuse to recognize these unions. Moreover, a recent survey found that roughly four of every 10 LGBTQ adults say they have been rejected by a family member because of their sexual orientation or gender identity.

As we discussed last week in part one, such discrimination can create unique estate planning challenges, and regardless of your marriage status, if you are an LGTBQ adult in a committed partnership, you should be aware of several issues that can affect your planning strategies. Specifically, we discussed how relying on a will alone may not provide sufficient protection for your partner/spouse, and we explained why incapacity planning is particularly crucial if you want your partner/spouse to have a say in your medical treatment and the ability to access and manage your assets in the event you are hit with a debilitating illness or injury.

Here we’ll address the final issue you should be aware of when creating your estate plan—securing parental rights for the non-biological parent of minor children.

3. Estate Planning Offers Alternative to Adoption

Although married same-gender couples now enjoy nearly all of the same rights as opposite-gender couples, there is one key right that’s still up in the air—the automatic right to be legal parents. While parental rights are of course automatically bestowed upon the biological parent of a child, the non-biological spouse/parent still faces a number of challenges when it comes to obtaining full parental rights.

Since the Supreme Court has yet to rule on the specific issue of the parental rights of the non-biological parent in a same-gender marriage, there is a tangled, often contradictory, web of state laws governing such rights. If you are a married same-gender couple, for example, some states consider the non-biological partner a legal parent based solely on your marriage, while other states do not.

Given the conflicting nature of state laws, many same-gender couples have turned to second-parent adoption to gain parental rights for the non-biological parent, since the Supreme Court has ruled that the adoptive parental rights granted in one state must be respected in all states. However, it can be extremely difficult for same-gender couples to adopt. In fact, 11 states currently permit state-licensed adoption agencies to refuse to grant an adoption, if doing so violates the agency’s religious beliefs. In other states, the law specifically forbids such discrimination, but given the Supreme Court’s ruling last week in Fulton v. City of Philadelphia, even those laws are susceptible to legal challenge.

In that case, the city canceled a contract with Catholic Social Services (CSS), a taxpayer-funded, faith-based foster care and adoption agency, after it refused child placement with LGBTQ families in violation of a city law prohibiting anti-LGBTQ discrimination. CSS sued the city, arguing that requiring it to follow the nondiscrimination policy violated its free exercise of religion since working with same-sex couples would go against its religious opposition to homosexuality.

In a unanimous judgment, the Supreme Court ruled in favor of CSS and found Philadelphia’s contract with CSS to be unenforceable. However, the ruling was narrowly focused on specific contractual language, and it does not create a broad free-exercise exemption from nondiscrimination laws, as many in the LGBTQ+ community feared.

That said, the Fulton case and others like it that are sure to follow, demonstrate that when it comes to same-gender couples seeking parental rights, second-parent adoption is not a panacea. Fortunately, same-gender couples do have an alternative to adoption—estate planning. Indeed, using a variety of estate planning strategies, as your Personal Family Lawyer®, we can provide a non-biological, same-gender parent with nearly all parental rights, even without formal adoption.

Starting with our Kids Protection Plan®,  LGBTQ couples can name the non-biological parent as the child’s legal guardian, both for the short-term and the long-term, while confidentially excluding anyone the biological parent thinks may challenge their wishes. In this way, if the biological parent becomes incapacitated or dies, their wishes are clearly stated, so the court can do what the parent would’ve wanted and keep the child in the non-biological parent’s care.

Beyond that, there are several other estate planning vehicles—living trusts, power of attorney, and health care directives—we can use to grant the non-biological parent additional rights. We can also create “co-parenting agreements,” which are legal agreements that stipulate exactly how the child will be raised, what responsibility each partner has toward the child, and what kind of rights would exist if the couple splits or gets divorced.

Experience You Can Rely On

In light of these issues, it’s vital for LGBTQ+ couples, especially those with children, to always work with experienced estate planning lawyers, and avoid using generic online documents at all costs. As your Personal Family Lawyer®, we have the experience of creating plans specifically designed to prevent your plan from being challenged in court by family members who disagree with your relationship.

Indeed, with the proper planning, we can ensure that no matter what happens to you, your partner and family will be protected and provided for in the exact manner you wish, rather than being stuck in a financial and legal nightmare. What’s more, our specialized planning services can help ensure that non-biological parents in LBGT partnerships have as many parental rights as possible, without resorting to second-parent adoption. Contact us, your Personal Family Lawyer® today to get started with a Family Wealth Planning Session.

Proper estate planning can keep your family out of conflict, out of court, and out of the public eye. If you’re ready to create a comprehensive estate plan, contact us to schedule your Family Wealth Planning Session. Even if you already have a plan in place, we will review it and help you bring it up to date to avoid heartache for your family. Schedule online today.

Following the death of the policy holder, the way in which proceeds from a life insurance policy are paid to the beneficiary (or beneficiaries) is known as the settlement option. And you might be surprised to learn that there are a variety of settlement options available besides the most common method—a lump-sum payout.

Depending on the life insurance company and policy, these options may be selected by the policy holder ahead of time or chosen by the beneficiary upon the insured’s death. Whether you’re the policy holder or beneficiary, it’s important that you understand these options in order to maximize the policy’s financial benefit and reduce potential taxes.

Here are six popular life-insurance settlement options:

1. Lump sum: The beneficiary receives the full death benefit all at once in a single payment.

2. Interest Income: The insurance company retains the original death benefit and makes interest-only payments to the beneficiary. The original benefit may be paid in full to the beneficiary after a certain time period or to a contingent (alternate) beneficiary upon the primary beneficiary’s death.

3. Fixed Amount: The beneficiary is paid a fixed amount on a regular basis until the total death benefit (plus any interest accrued) has been paid out. If the beneficiary dies before all of the funds have been paid, a contingent beneficiary may receive the remaining amount.

4. Fixed Period:  The beneficiary receives regular payments of both principal and interest over a fixed period of time, typically up to 30 years. If the beneficiary dies before the time period is over, the remaining balance may pass to a contingent beneficiary.

5. Life Income: The beneficiary receives guaranteed payments over the remainder of his or her life. The amount of the payments is determined by the insurance company and based on the beneficiary’s age and gender. The payments continue until the beneficiary dies. If he or she dies earlier than expected, the insurance company keeps the unpaid amount.

6. Life Income Period Certain: Unlike the life income option above, where payments stop when the beneficiary dies, this option guarantees fixed payments for a certain time period such as 10 or 20 years. If the beneficiary dies before the term expires, a contingent beneficiary may receive the remaining payments.

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Life insurance payouts made in a lump sum are not subject to income taxes. With other settlement options that pay out in installments over time, the original death benefit (principal) is not taxed, but any interest that accrues IS taxed as income when it is paid to the beneficiary.

We can advise you on the settlement option that’s best suited for your particular needs. We can also support you in putting in place planning tools like trusts to protect the proceeds once they’re paid out. Schedule a Family Wealth Planning Session today to learn more.

Proper estate planning can keep your family out of conflict, out of court, and out of the public eye. If you’re ready to create a comprehensive estate plan, contact us to schedule your Family Wealth Planning Session. Even if you already have a plan in place, we will review it and help you bring it up to date to avoid heartache for your family. Schedule online today.

Proper estate planning can keep your family out of conflict, out of court, and out of the public eye. If you’re ready to create a comprehensive estate plan, contact us to schedule your Family Wealth Planning Session. Even if you already have a plan in place, we will review it and help you bring it up to date to avoid heartache for your family. Schedule online today.

One of the coolest parts of owning a business is getting to come up with its name. On the creative side, you’re choosing a name to represent and encapsulate the essence of your life’s work. On the practical side, you’re trying to come up with something that will most effectively grab the interest of potential customers.

Another issue you might not be aware of, though, is how many different laws exist related to naming your business. These laws vary state by state, so what’s legal in one place might not be legal in another. To this end, navigating state laws governing business names is something that not only startups must consider, but also those well-established companies that might expand into more than one state.

While it’s impossible to list all of those state laws here, there are several common factors most state-name laws center around. If you’re in the process of naming a new business or looking to extend your existing brand into a different state, here are a few of the areas you’ll need to consider:

The first and most obvious thing you’ll need to determine is if the name you’ve chosen is already taken by another business—or is so similar to another company’s name that having two of the same would cause confusion. Each state government will have a specific department that controls business-name laws, and most of those departments have an online search function dedicated to this very purpose. Just Google your state’s “business name availability” to get started.

Nearly every state has some requirements governing how a company’s name can reflect its entity type. For example, such laws will allow only a businesses that’s truly classified as a limited liability company or a corporation to use the words “limited liability company” or “corporation” in its name.

The same laws also stipulate how the entity type should be spelled out and punctuated. Some states, for example, allow you to use the abbreviation “LLC” if you’re a limited liability company, while others make you spell out the entity. Some even legally require the use of periods between each letter of the suffix, as in (L.L.C).

In many professions, such as law, medicine, and accounting, you’re required to be professionally licensed in the state in order to do business there. If this is the case for you, the business name you choose will not only have to adhere to your profession’s own licensing board, but also your state’s secretary of state (SOS).

In certain states, the name-approval process starts with getting approved by the licensing board, but in others, it starts with the SOS. To avoid wasted time and paperwork, be sure to check where your state starts the name-approval process before making any applications.

Similarly, business-name laws prohibit anyone who’s not licensed in the state to use certain professions in the company’s name, such as “engineer,” “architect,” and “interior designer,” even if you’re licensed in another state. This can get confusing and even controversial due to the fact that some professions, like massage therapy, are licensed in some states and not others.

In Florida, for example, only licensed massage therapists can use the title “massage therapist” in their business name. But in California, anyone can call themselves a massage therapist because no state-licensing requirements exist. However, only those who are actually licensed can legally call themselves a “licensed massage therapist” or “certified massage therapist,” providing alternatives for those who want their business to sound as professional as possible in states without licensing requirements.

Many states also have broad restrictions governing the use of certain industry terminology in your business name. For example, using terms like “banking,” “fidelity,” and “finance” can be restricted. Restrictions can also exist for general career areas like education, law enforcement, and medicine, as well as for more specific terminology from each individual field.

Whether you’re getting ready to launch your business or you’re looking to expand into another state, we can assist you with the legal ins and outs of state-naming laws.

We offer a complete spectrum of legal services for business owners and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer you a LIFT Your Life And Business Planning Session, which includes a review of all the legal, insurance, financial, and tax systems you need for your business. Schedule online today.

2020 was a nightmarish year for many families. But thanks to recent legislation, you could see a silver lining in the form of major tax breaks when filing your income taxes this spring. First up, although it’s technically not a tax break, the IRS recently announced that the deadline for filing your 2020 federal income taxes has been pushed back from April 15 to May 17, 2021, which gives you an extra month to get your tax return handled.

The postponement applies to individual taxpayers, including those who pay self-employment taxes. But the extension does not apply to first-quarter 2021 estimated tax payments that many small business owners file. So if you file quarterly taxes, contact your tax advisor now, if you haven’t already done so.

Additionally, the CARES Act passed in March 2020 provides individual taxpayers with several hefty tax-saving opportunities, many of which are only available this year. What’s more, President Biden’s new relief package, known as the American Rescue Plan (ARP), which went into effect in March 2021, not only offers additional stimulus payments to most Americans, but it also includes significant tax relief for those taxpayers who lost their job and had to rely on unemployment benefits in 2020.

While there are dozens of potential tax breaks available for 2020, last week in part one of this series, we highlighted the first three of seven ways you can save big money on your 2020 tax return. Here in part two, we’ll discuss the remaining four ways you can save.

4. New Rules for Early Withdrawals From Retirement Accounts

If your finances were seriously impacted by last year’s economic turmoil, you may have needed to withdraw funds from your retirement accounts to cover your expenses. And thanks to new rules under the CARES Act, you have more flexibility to make an emergency withdrawal from tax-deferred retirement accounts in 2020, without incurring the normal penalties.

Typically, permanent withdrawals from traditional IRAs or 401(k) accounts are taxed at ordinary income rates in the year the funds were taken out. And pulling out money before age 59 1/2 would also typically cost you a 10% penalty.

But thanks to the CARES Act, you can avoid the 10% penalty (if under 59 1/2) on up to $100,000 in pandemic-related distributions from your retirement account in 2020. You are also allowed to spread such distributions over three years to reduce the tax impact. Or better yet, you can opt to put this money back into your retirement account—also within three years—and avoid paying taxes on the money all together.

However, because early withdrawals can negatively impact your retirement savings down the road, if you are looking to take advantage of this provision, you should consult with us, as your Personal Family Lawyer®, and your financial advisor first. Also, note that employers are not required to participate in this provision of the CARES Act, so you’ll also need to check with your plan administrator to see if it’s available at your workplace.

5. Medical Deductions 

If you had hefty medical bills in 2020, you might be able to get some tax relief using increased deductions. Under the CARES Act, you can deduct any medical expenses above 7.5% of your adjusted gross income (AGI). Your AGI is your total income minus any other deductions you’ve already taken.

For example, if your AGI was $100,000, you can deduct qualified unreimbursed medical expenses that exceeded $7,500 in 2020. However, you have to itemize your deductions in order to write off these expenses, so meet with us to determine if this would make sense for your situation.

6. Earned Income Tax Credit

The Earned Income Tax Credit (EIC) is a refundable tax credit for low- and middle-income taxpayers that’s often overlooked. The amount of credit you can claim depends on your annual income and the number of kids you have—but people without kids can qualify, too.

Below are the maximum EIC amounts for 2020, along with the maximum income you can earn before losing the credit altogether. Note: You can’t claim the EIC if you are a married individual filing separately.

Additionally, for the 2020 tax year, there are special rules for the EIC due to the pandemic: You can use either your 2019 income or your 2020 income to calculate your EIC and use whichever number gets you the bigger credit. This doesn’t happen automatically, though, so be sure to ask your tax professional to run the numbers both ways and choose the option that offers the most savings.

7. Child Tax Credit

If you have minor children aged 16 or younger, the Child Tax Credit is one of the most effective ways to reduce your federal income tax bill—and there are special rules for 2020 that can save you even more.

For your 2020 taxes, you can claim up to $2,000 per qualified child as a tax credit, and under rules due to the pandemic, you can use either your 2019 income or your 2020 income to calculate your credit—whichever year offers the most savings. The credit begins to phase out when your AGI reaches $75,000 for single filers, $150,000 for joint filers, and $112,500 for head of household filers.

What’s more, with the passage of Biden’s new ARP this March, the child tax credit is set to get even bigger in 2021. When you file your taxes next year, the per child credit will go up to $3,000 or $3,600, depending on your child’s age. Look for a future blog post detailing all of the new tax saving opportunities available under the ARP for 2021 and beyond.

Maximize Your Tax Savings for 2020

These are just a few of the numerous tax breaks available for 2020. Indeed, there are plenty of other deductions and credits that might be up for grabs depending on your situation. Meet with us, as your Personal Family Lawyer®, to make sure you don’t miss out on a single one. Contact us today to schedule your visit.

Proper estate planning can keep your family out of conflict, out of court, and out of the public eye. If you’re ready to create a comprehensive estate plan, contact us to schedule your Family Wealth Planning Session. Even if you already have a plan in place, we will review it and help you bring it up to date to avoid heartache for your family. Schedule online today.