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Have you made any resolutions for 2009 regarding legal matter? Research shows that resolutions are useful. People who explicitly make resolutions are 10 times more likely to attain their goals than people who don't explicitly make resolutions. We can help you make and cost effectively attain the following commonly necessary goals:
1 Estate Plan - create or update your will, trust, power of attorney and patient advocate designation. Also, review current beneficiary designations on life insurance policies, investment and retirement accounts.
2 Employment Agreement - protect your rights as an employer and put in place necessary covenants-not-to compete and confidentiality agreements to protect customer lists and information vital to your business.
3 Real Estate Taxes - appeal your 2009 property tax assessment to the board of review to obtain a reduction in taxable value in line with current market conditions.
4 Accounts Receivable - every business has them. Some of your customers may require a demand letter or lawsuit to move your payment to the top of their list of priorities.
5 Buy-Sell Agreement - your company should have an agreement among its shareholders or members which details how stock or membership interest will be purchased in the event of a death, disability, divorce or retirement.
6 Annual Meeting Minutes - this is a free service we offer clients who have Michigan corporations and is a requirement of Michigan law.
7 State and Federal Tax Issues - resolving any pending state or federal tax disputes will stop penalties and interest from accruing. Former IRS Agent John Rankin is a well respected asset of firm and available to help. Two of our attorneys are admitted to the US Tax Court and are actively involved in these matters.
8 Medicaid Planning - setting up a Medicaid plan for a relative to protect family assets from the costs of nursing home care (now $6500 month).
9 Promissory Notes - document loans to your business, friends or family members with Promissory Notes, and where possible, secure re-payment of these loans with mortgages and security agreements. Such notes document (1) an increase in basis for any losses for an S Corp and (2) increase at risk amounts for any LLC losses.
10 Dissolve No Longer Needed Business Entities - Properly dissolve any corporations, LLCs or partnerships that are no longer needed reduces on going cost and potential liability.
We appreciate your business and referrals!
 Byron "Pat" Gallagher, Jr. 2408 Lake Lansing Road
Lansing, Michigan 48912
Direct Dial: 517-853-1515
Toll Free: 888-220-1273
Detroit: 313-963-4600
Fax: 517-853-1501
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| More Bank Customers Think Smaller Institutions These Days By Pallavi Gogoi, USA TODAY
A tiny bank in Happy, Texas, is a century old but hasn't before seen the kind of deposit growth that it's seen in the last three months.
By any measure, it's been an extraordinary year for anyone in the U.S. banking industry. But Happy State Bank, with headquarters in a town with an irresistible name, has been the face of steadfast calm during a period of intense global financial turmoil, drawing $30 million in deposits since September into its 20 branches in the Texas Panhandle, double the rate of deposit growth in a similar period in recent years.
ADVICE: How to tell if a bank's worthy of your money:
"It's our 100th-year anniversary, and it's a nice way to celebrate," says Pat Hickman, CEO of Happy State Bank, which has $960 million in assets and was established in 1908 in Happy, a town with just over 650 residents in northwest Texas.
This year's financial chaos hit its peak in September when investment bank Lehman Bros. collapsed, the government seized insurance giant American International Group, Washington Mutual became the largest bank failure in U.S. history, and an ailing Wachovia was acquired by Wells Fargo. But as the top tier of the financial services industry faltered, small and regional banks, as well as credit unions, started seeing their cash deposits rise dramatically as nervous Americans shied away from big banks. Some of these smaller financial firms saw an increase in small businesses knocking on their doors. And despite rampant headlines about a credit freeze and plunging housing market, they have even been writing more home loans this year than last year.
In her 18 years as a banker, Sebrina Verburgt hasn't seen anything like this: new customers with cash in hand, streaming in through the doors of the 11 branches of the United Heritage Credit Union, where Verburgt is senior vice president of operations. Many of them had the same story to tell: They were moving cash from larger banks, afraid that they would fail.
Just ask Clay Strange, a lawyer in Lakeway, Texas, who decided to move $20,000 into United Heritage from his Charles Schwab money market account, after reading that some of the money market funds were unstable because they had invested in bad debt securities of firms such as Lehman Bros. "I wanted to move my money into something that was clearly insured," says Strange.
In September, United Heritage, in Austin, saw a 52% increase in new checking accounts from a year earlier. That came after 35% growth in July and 43% in August.
"This is unprecedented," says Verburgt, who is seeing the most growth in one of her checking account products that offers an annual yield of 5.01%, far more attractive than the nationwide average of 0.22% on bank checking accounts, according to Bankrate.com.
An October survey by the Independent Community Bankers of America reveals that 70% of community banks saw an uptick in deposits in the past year. Nationwide, these higher-interest checking accounts saw an 11.6% rise in new accounts in the third quarter this year, vs. the previous year, according to BancVue, which helps set up technology at community banks nationwide.
"People are scared of large, national names, because of the spectacular failures this year," says Joshua Siegel, managing principal of StoneCastle Partners, a New York-based private-equity firm that invests in community banks.
Smaller banks fail, too. It's not as if only large banks failed in 2008. In fact, as the mortgage crisis intensified and home foreclosures surged, some smaller banks also buckled. Of the 25 bank failures this year, 16 have been banks with less than $1 billion in assets. Several were either based in the states with the worst real estate downturns - California and Florida - or had opened loan offices there. Still, compared with Washington Mutual's $307 billion in assets, the rest of the failed banks had a combined total of $65 billion in assets.
Of course, given that the Federal Deposit Insurance Corp. has decided to insure deposits up to $250,000 from $100,000 previously, it's not as if many people will lose their deposits. Rather, the fears on Main Street reflect how shaken the public has become from the financial turmoil. And the government's efforts to save the financial system from collapse by investing in some of the country's largest banks have only spooked Americans further.
Such faith in smaller banks, though, isn't necessarily flawed. The larger banks, with an average size of $10 billion in assets or more, today control more than $10 trillion in financial assets - even though there are only 115 of them.
However, a lot of their assets are made up of toxic financial securities that have lost a lot of value - whether it's the $2 trillion in collateralized debt obligations that are based on subprime mortgages and low-grade bonds, or the $2 trillion in asset-backed securities that are based on car and student loans and credit card debt.
In contrast, there are 8,278 banks that have less than $10 billion in assets and only $3 trillion in assets combined. However, according to StoneCastle Partners' review of FDIC data, these smaller banks have 50% more capital than the larger banks as a percentage of loans, so their ability to absorb losses is higher, a key distinction during a recession.
Smaller banks also have most of their loans secured by real assets such as property, equipment, receivables and even personal guarantees from senior management, which makes for better loan recovery in case of failure. So these banks have had less than half the rate of charge-offs in the last 15 years, compared with their larger, undercapitalized counterparts.
"Most community banks just didn't make subprime loans or get involved in exotic loans," says Burton Zwick, a business professor at Fairleigh Dickinson University.
Happy Bank CEO Hickman, for instance, points out that out of 8,881 loans outstanding, only 17 were 30 days past due. For now, the banks that people trust in their communities are attracting dozens of new customers. Consider:
·First Arkansas Bank & Trust started running ads in the Arkansas Democrat-Gazette and other local newspapers touting its conservative philosophy and safe reputation. Larry Wilson, CEO of the 28-branch Jacksonville, Ark., bank, also publicized his new high-interest checking account, which was offering a 4.4% annual yield. The ads helped boost new accounts more than 900% since last year. "People want higher rates but want to get it from a place they can trust," says Wilson.
Regional bank Hudson City Bancorp is one of the few banks whose stock price hasn't fallen this year. Hudson City, with assets over $50 billion, is by no means a community bank. However, it has a very localized, community approach with its 127 branches in the tri-state area of New Jersey, New York and Connecticut. "Our loan production is at record levels," says CEO Ronald Hermance Jr. The Paramus, N.J., bank accepted more mortgage applications during the first nine months of 2008 than in all of 2007, originating $4 billion of mortgage loans, compared with $2.65 billion for the comparable period in 2007. In the same period, deposits grew by $2.14 billion.
Yakima Valley Credit Union, based in Washington, the state were WaMu was headquartered, saw 433 new members in September, a 57% jump from the same month last year, and 416 new members in October, a 22% jump. "On average, the balances in these accounts are also higher," says CEO Mina Worthington.
Happy State Bank, too, has made gains in more ways than one this year. Hickman, who had been on the lookout to grow his business, fielded a call earlier in the year from Citibank, which was unloading some of its branches in Texas to focus on its core operations as it worked to shore up its balance sheet. Hickman was offered eight Citibank branches in his area, which he promptly bought in June for about $20 million.
Red Mountain Bank in Hoover, Ala., also saw a 23% increase in deposits in three months, compared with a 19% increase for all of last year. "We are also seeing small and medium-size businesses seeking us out for loans," says CEO Mike Washburn.
One is Clyde Tillman, president of Press Access, a printing-press business in Atlanta with annual revenue of $30 million. After banking with Wachovia in recent years, Tillman says he was tired of "being just a number" at the large bank, where he had to explain his business each time to a different loan officer.
Making the switch
Tillman says that he runs a profitable company and should be a desirable account. His business sometimes demands large amounts of upfront investments to buy large printing machines, and then weeks go by when he doesn't have to draw on his $6 million credit line at all.
"It's feast or famine for our loans, which is why we need someone to understand our business," he says.
So he took his account to Red Mountain, where the loan officer visited his business to understand his goals and structured a loan program accordingly. "Now I tell people to change to a local bank," he says.
It is these sorts of ties and deep connections that bankers have woven in many communities that is bearing fruit in a year marked by tremendous tumult in banking. People all around the USA have lost trust and are flailing around looking for security. "In some local communities, the two most important people are the mayor of the town and the president of the bank, who sponsors most local charity work and events," says Siegel of StoneCastle Partners.
Happy State Bank's Hickman could pass as just one of those people. Besides sponsoring almost all the athletic teams and activities in the town's one school district, his bank is also the main sponsor of the town's largest celebration of the year, called Happy Days, which starts with a Western dance on a Friday night in August and is celebrated through the next day with a parade and a barbecue.
The bank's six Volkswagen Beetles cruise in the parade that ends with a rodeo at the end of the day. Hickman and his bank's employees are active participants, serving the town's residents barbecue, coleslaw and potato salad.
It might not be a surprise that practically the entire town banks at Happy State, and now folks from nearby towns are joining in.
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Five Things Clients Should Know Before Appearing in Court
Chances are you will have to appear in court at some point in your life. The reasons for having to appear in court can vary greatly. For example, you may be required to appear in court as a party, such as a defendant facing criminal charges or as a plaintiff or defendant in a civil litigation. On the other hand, you may be subpoenaed to appear to serve as a witness or a juror. Depending on your reason for being in court, the types of court can also differ. However, regardless of the court you are in or your reason for being there, there are several universal rules that you should abide by when appearing in court. While much of the following advice may come as common sense, most judges, court personnel, and attorneys would agree that they are not always practiced by individuals appearing before the court.
Attire
The way you dress and present yourself when you appear in court can make a big difference. The reason for this advice is the old adage about first impressions. While it may not be necessary to wear the best clothes that you have in your closet, it is important to be well-dressed, well-groomed, and generally presentable when appearing in court. Jeans, shorts, t-shirts, hats, sandals, and excessively baggy clothes are usually not acceptable courtroom attire. In addition, clothing with offensive, vulgar, obscene, or suggestive words, slogans, or pictures will not be allowed in the courtroom. Instead, you should dress conservatively in business attire and avoid flashy clothes, hairstyles, and accessories.
Courtroom Behavior
As a general rule, you should not be loud or disruptive while court proceedings are in progress. While quiet interaction in the back of the court is customary, it is good practice to leave the courtroom if a lengthy discussion is necessary. When entering and leaving the courtroom, do so quietly and be sure not to slam the courtroom doors. All cell phones, pagers, and other electronic devices should be turned off before entering the court. In fact, some courts will not allow non-attorneys to bring electronic devices into the building. Finally, refrain from bringing any food, drinks, or chewing gum into the courtroom.
Be On Time and Be Prepared
Most courts are on a tight time schedule. As a result, most judges do not have much patience for people who are late or unprepared when appearing in court. Be sure to arrive at least fifteen minuets before you are scheduled to appear. That will leave plenty of time to find a parking spot (which are often hard to find near busy court buildings), get through security, and find your destination within the court. Before appearing in court, review your records so that you will be able to speak intelligently and concisely regarding the matter before the court. It is also important to bring all documents that may be applicable when appearing in court as you may need them for reference. It is always better to have the documentation and not need it than to need it but not have it with you.
Deference to the Court
When appearing in court, it is important to always show respect and deference to the judge on the bench. It is customary to stand up when the judge enters. You should remain standing until the judge or bailiff instructs the courtroom to be seated. Similarly, you should stand when the judge exits the courtroom. When addressing the judge, you should stand up and always refer to the judge and "Your Honor" or "Judge." You should never interrupt the judge or speak over the judge when he or she is addressing the court.
In addition to the judge, you will likely interact with numerous court personnel and staff when appearing in court. These individuals include the judge's assistants, court reporters, court clerks, and bailiffs. These individuals have the ability to make your experience with the court a lot easier at times by providing you with help and assistance with various matters. Therefore, it is very important to be particularly courteous to the court personnel.
Remain Composed
Regardless for your reasons for being in court, there is usually a lot a stake. The events that take place inside a courtroom are often sensitive, emotional, and have the potential to become heated. Whether you are a party in the courtroom, a witness on the stand, or a juror in a deliberation room, things may not always turn in your favor. If things do not go your way in a courtroom, it is extremely important to remain calm and composed. There is a fine line between advocating your position and willfully disrespecting the authority of the court. Becoming visibly boisterous and arguing with the judge or court personnel will only make matters worse. If you feel an injustice has occurred, remain composed and attempt to seek judicial relief in the appropriate manner.
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Jennifer Endl Admitted to the United States Tax Court
On October 14, 2008, Jennifer was admitted to the United States Tax Court headquartered at 400 Second Street, NW, Washington, DC 20217.
What is the US Tax Court?
The United States Tax Court is a court of record established by Congress under Article I of the United States Constitution. When the Commissioner of Internal Revenue has determined a tax deficiency, the taxpayer has the opportunity to docket a case and dispute the deficiency in the Tax Court before paying any disputed amount.
The Tax Court also has the authority to redetermine transferee liability, make certain types of declaratory judgments, adjust partnership items, order abatement of interest, award administrative and litigation costs, redetermine worker classification, determine relief from joint and several liability on a joint return, review certain collection actions, and review awards to whistleblowers who provide information to the Commissioner of Internal Revenue on or after December 20, 2006.
How do I file a Tax Court Case?
A case in the Tax Court is commenced by the filing of a petition and a $60.00 filing fee. The petition must be timely filed within the allowable time. The Court cannot extend the time for filing which is set by statute. As soon as the petition is filed, payment of the underlying tax ordinarily is deferred until the case has been decided. (This deferment is on a case to case basis)
In certain tax disputes involving $50,000 or less, taxpayers may elect to have their case conducted under the Court's simplified small tax case procedure.
The benefit of small tax cases are that trials generally are less formal and result in a quicker disposition. The negative aspect of the small case procedure is that once decisions are entered, they are not appealable.
Once docketed, cases are calendared for trial as soon as and the parties are notified by the Court of the date, time, and place of trial. Trials are conducted before one judge, without a jury, and taxpayers are permitted to represent themselves if they desire. Taxpayers may be represented by practitioners admitted to the bar of the Tax Court.
The vast majority of cases are settled by mutual agreement without the necessity of a trial. However, if a trial is conducted, a report is ordinarily issued by the presiding judge setting forth both findings of fact and an opinion. The case is then closed by entry of a decision.
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| What Does the Future Hold for the Federal Estate Tax?
With the recent election of Barack Obama, change will certainly come to Washington. One significant change will be the policy surrounding the federal estate tax. Under current law, the federal estate exemption amount is set to increase from $2,000,000 to $3,500,000 in 2009 with a maximum tax rate of 45%. In 2010, the federal estate tax is set to completely disappear; again reappearing in 2011 and beyond with an exemption amount of $1,000,000. Certainly, it is hard to predict future legislation, but major changes in the tax code expected. Daily headlines regarding the struggling economy and massive bailouts will put President-elect Obama and Congress under intense political pressure to substantially reform many areas of government, including the federal estate tax. Changes should be expected to take effect in the calendar year of 2009. President-elect Obama's campaign position was against full repeal of the federal estate tax and instead supported making the 2009 numbers permanent in 2010 and beyond. However, the economy may cause the President-Elect and Congress to reconsider these numbers. One thing is certain; the tax laws will change with the new administration. It is imperative to adjust your estate plan according to the changing policy. Proper planning with your attorney will maximize your opportunities under the new administration and place you and your family in a stronger financial position going forward. If you have any questions on how these changes may effect the planning of your estate, please call Craig Gerard at (517) 853-1510 or email at csg@thegallagherlawfirm.com. | |
