01 March

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Charities Must Follow Compliance Laws

Helping others through a nonprofit charity is often viewed as noble. But a charity’s good deeds does not provide it carte blanche. In fact, nonprofit charities are highly regulated, and failing to understand those regulations can be disastrous. There are two dozen different types of tax exempt exemptions under the Internal Revenue Code. This article uses the most common exemption – 501(c)(3) – as the example. First and foremost, the nonprofit charity is a business entity. In Minnesota, first the nonprofit files with the Minnesota Secretary of State as a business entity. Second, the nonprofit applies to the IRS for its...

16 February

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Understanding Your Estate Planning Goals

Posted by Evon Spangler

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Estate planning is providing for the care of your minor children and/or special needs beneficiaries while giving what you want to whom you want at the least cost possible while avoiding estate taxes and planning for incapacity. In determining the type of estate planning, you must first understand your goals. If your goal is to… avoid probate, then you must have a trust and/or file a transfer on death deed for your real property and complete your beneficiary designations. transfer your homestead without incurring the fees of a trust, then you must do a Transfer on Death Deed (TODD). avoid...

02 February

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The Mistake of a Business Owner Regarding Ambiguity in a Contract

Posted by Evon Spangler

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Ambiguities in contracts are created when a provision can be interpreted in more than one way. However, the provision has to be objectively open to more than one interpretation. Unfortunately, ambiguities often lead to litigation, which is expensive, difficult and the result is not guaranteed or it leads to unintended consequences. In addition, an ambiguity in a contract can be held against the drafter if the contract does not have a provision stating otherwise. Consider the following hypotheticals regarding ambiguities: Hypothetical #1: More of That, Inc. is owned by Bea Trice. One of Bea’s key employee’s wants to purchase the business....

18 January

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Real or Personal Property

Posted by Evon Spangler

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It is important to understand the difference between real and personal property because a misunderstanding could have significant legal consequences. Real property generally refers to land and everything that is attached to it. Personal property generally refers to the stuff that you own that is not real property. Trailer homes are generally considered personal property in the State of Minnesota. Therefore, you cannot attach a mechanic’s lien to a trailer home. In addition, a mobile or manufactured home must be licensed as a motor vehicle in the State of Minnesota in lieu of paying a property tax. Real property cannot be conveyed...

04 January

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Year-End Review

Posted by Evon Spangler

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Legal knowledge provides protection for your business AND your family. As professionals, we work hard every day to ensure the success of our businesses. Unfortunately, if we are not well prepared and protected, our business, our reputation and even our personal assets can all be lost, due to a single mistake or oversight. Working with a trusted business law attorney, accountant, business banker, financial planner and commercial insurance agent is essential to maintain the success of your business. If you answer “false/no” to any of the following statements, your business has exposure. Is your business properly incorporated? If your...

07 December

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Medical Assistance and Your Homestead

Posted by Evon Spangler

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For many people, their homestead is their most valuable asset. However, many people do not realize the impact of medical assistance on their homestead. This article will provide a general overview through hypotheticals. Hypothetical: Mary is 75 years of age and she lives alone in her homestead. She does not have long term care insurance. She decides that she wants to move to assisted living for the community aspect of assisted living. So, she moves out of her home and moves into assisted living. She then sells her home. Analysis: Mary’s home was an exempt asset for medical assistance purposes until she...

23 November

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The Mistake of a Business Owner Regarding a Purchase Agreement

Posted by Evon Spangler

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If you are going to purchase a business or sell your business there are several factors that a business owner will want to take into consideration. Business owners often make a mistake when they erroneously believe that a “simple” purchase agreement is sufficient. Consider the following hypotheticals: Hypothetical #1: Susie’s Little Educators, Inc. is owned by Susan Queen. The business is licensed by the State of Minnesota. One of Susan’s key employee’s wants to purchase the business. They find a purchase agreement on the internet and use it. The agreement includes that the key employee will purchase the business under a...

02 November

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The Sale of a Business and Real Estate

Posted by Evon Spangler

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It is not uncommon for a business owner to sell, at the same time to the same buyer, a business and the real estate in which the business is based. In other words, the business owner owns the business and the real estate in which the business is based. Often, to save legal fees, a business owner will want to have one purchase agreement that includes both the sale of the business and also the real estate in which the business is based. This is rarely advised. Generally, in this type of situation, you will want to have one purchase agreement...

28 September

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A Step Up In Basis

Posted by Evon Spangler

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It is common in estate planning and business succession planning – amongst other areas – to hear the phrase “a step up in basis.” A step up in basis means that the basis (i.e., the value) of the asset is stepped up to the value of the asset as of the date of death. Therefore, the tax is based on the fair market value as of the date of death rather than at the date of purchase. This article will provide a general overview through hypotheticals. The information provided is not tax advice. Please consult with your tax advisor for...

21 September

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Real Estate Taxes

Posted by Evon Spangler

in Uncategorized

Not paying your real estate taxes in Minnesota can result in your property being foreclosed upon by the government. If a foreclosure occurs under these circumstances, in Minnesota, under current law, you are not entitled to the surplus from the sale of the home. Hypothetical: Mary owns her home. She moves into assisted living. Due to the cost of assisted living Mary can no longer afford to pay her real estate taxes. So, she stops paying them. The county forecloses on her home. The home is worth $200,000. The property taxes, with interest, are $25,000. In this hypothetical, if Mary does not...

Blog

Charities Must Follow Compliance Laws

Understanding Your Estate Planning Goals

The Mistake of a Business Owner Regarding Ambiguity in a Contract

Real or Personal Property

Year-End Review

Medical Assistance and Your Homestead

The Mistake of a Business Owner Regarding a Purchase Agreement

The Sale of a Business and Real Estate

A Step Up In Basis

Real Estate Taxes

The Death of a Business Owner: The Importance of Buy-Sell Agreements

Sick/Safe Time Ordinances in Saint Paul and Minneapolis

Updating Contracts

Cyber Policies

The Personal Guarantee of a Business Owner