Succession Law: The Importance of Having a Will

Succession Law: The Importance of Having a Will

Although we might not like to think of it, death is a certain fate for us all.  When we pass away, our families will go through a stressful and traumatic time as they come to terms with their loss.  At the same time, there is a requirement for the administration of our estate, and this is usually bestowed upon a close relative or friend during this already painful time.  However, a lack of foresight and planning can be catastrophic, leaving behind a tangle of assets and liabilities and possibly a hefty inheritance tax bill, depending on jurisdiction.  On top of that, the absence of a will can mean a distribution of assets on the basis of standard 'default' rules, rather than on the basis of your individual preferences.  In this article, we will look at some common provisions in the absence of any will, and aim to justify the benefits of making a comprehensive and clear will during your lifetime.

Most jurisdictions will bear some liability to tax on death.  This can be a specific problem for the administrators of estates, usually close friends, who must ensure every known asset and liability is accounted for before making legacies and signing off the tax bill.  A major problem comes with the personal liability attributed to the administrators, which means that should anything 'slip through the net' which is later discovered, there may be increased liability to tax.  In practical terms, this could mean a surprise bill for several thousand which has already been distributed in legacies and for which the administrator must personally account.  Providing for these outcomes in a will is one of the best ways of avoiding this hassle and stress, and it can also be the best way to ensure all assets and liabilities are uncovered.  By drafting an effective will, you can be sure your loved ones don't face financial hardship after you're gone.

In the absence of a will providing specifically for the administration of a deceased's estate, it is up to the laws of intestacy to determine what happens to the entirety of our worldly possessions.  Unfortunately, this doesn't usually correspond with the way we'd like things to turn out.  For example, in a number of jurisdictions there are automatic provisions for spouses and kids, meaning you can disinherit, even with a will.  There is also usually a default order of preference of who gets what and how much they get, which doesn't necessarily match your favourite relatives, or correspond to actual family set ups.  In fact, cohabiters might run into problems getting anything, including the house in which they live without proper testamentary provisions in their favour.

As you can see there are a number of obvious benefits to drafting a will during your lifetime.  Sadly, many thousands of people die each year without making these provisions, and it really is a real headache for their friends and relatives who are left with the burden of a fair settlement.  Intestacy causes hostility and stress, which can be readily avoided by just simply making a written will.  If you haven't made a will, it is probably a good idea to make a appointment as soon as is convenient with a legal adviser to do so, to ensure your family are provided for as you would intend and to promote a favourable distribution of your estate on death.

Supreme Court Abortion Decision

After much deliberation and discussion, the Supreme Court has returned a critical strike to the core of women's rights in the abortion arena.  The court in a 5-4 decision banned a medical procedure known as a partial-birth abortion or Dilation and Extraction.  This abortion procedure was performed after the 20th week of pregnancy.  While the pro-rights crowd is naturally upset over the ban, they are horrified over the fact that there are no exceptions to the ban that would enable a doctor to save the life of a woman if it was medically necessary to perform the procedure.  

Doctors can face up to 2 years in prison if they are convicted of performing the procedures, which will greatly limit the numbers of doctors performing the procedures and likely increase the number of states placing bans of the entire abortion procedure as well.  The decision came from a split Supreme Court, with two of the justices being hand picked by Bush himself.  This is a cause of great concern, suggesting that the Supreme Court has turned into a very conservative place, despite the lack of support for Bush and many of his ideas and practices on a broader level.  The Supreme Court's involvement in politics is usually noted, but given the gravity of this decision it is clear where certain allegiances lie.

Is the Supreme Court really following the wishes of the majority, do they really have the legal right to determine that a medical decision can or cannot be performed?  The anti-abortion camps in the GOP are happy following the decision and are busily looking for more ways to put a damper on the rights of women in regards to abortions.  How will this decision be regarded when it comes election time, and the Presidential elections come around?  What about the midterm elections next time they are scheduled? 

Many people are left to wonder if the Supreme Court decision is truly a legal decision, or nothing more than a very carefully selected group of ultra conservative judge's who are following Bush's wishes and desires in regards to the case.  The case was sitting before a panel of judge's who seem to thrive off of the acceptance of Bush, and Bush was noted as being encouraged by the ruling and declaring it as a victory for his administration.  

The court defended its decision by saying that it was doing nothing more than drawing a line between abortion and infanticide.  There is a difference between killing a child, or an infant, and an abortion.  One of the most notable differences is that a child or infant is not considered an infant until the first breath of air is taken into the lungs.  An abortion does not allow the infant to take that first breath of air, therefore, removing the term infant from their being.  

While it is noble that the Supreme Court is looking and seeking to protect all forms of life, they should also concern themselves with the lives of the mothers who carry babies, who should not be allowed to continue to term for medical reasons.  There are numerous women each year who become pregnant who are unable physically to carry a child to term, and must abort the child, or risk their own life.  What has the Supreme Court done in order to protect those mothers, or improve their quality of life? 

Taxation Law for Small Businesses

Taxation Law for Small Businesses

Taxation law is a complex and in-depth area of concern for the small business owner.  With potential pecuniary and criminal consequences, it is of paramount importance to ensure as a business owner, you are familiar with the tax consequences in your jurisdictions, and the ways in which you can minimise your liability.  Whilst one of the most legally important things to understand as a small business owner, taxation law also provides an excellent opportunity for saving money and increasing profitability within a small business environment.  In this article, we will look at some of the main and most common tax implications of running a small business, and some of the most effective ways of ensuring you pay less tax through your small business operation.

Tax regimes vary from jurisdiction to jurisdiction, and the implications of running a small business also vary, both in terms of the legal and financial requirements.  Having said that, there are a number of common elements that transcend jurisdiction and appear in numerous guises across various systems that can be of use to the small business owner.  One of the first things to consider as a small business owner is to establish a limited liability company.  The primary reason for this is that limited liability companies usually provide a more relaxed tax regime as compared to income tax liability.  A sole proprietor operating out-with the parameters of a corporate entity is liable to account for profits as income, which can lead to a greater tax liability and potential individual state contributions.  As a corporate entity, the owner can pay himself via share dividends, which carry a lower tax liability and thus minimising his overall liability to tax.  This is significantly better than paying oneself a wage, which bears the tax liability from both ends, i.e. the company is liable to taxation as is the employee.

Another essential for the small business owner is what is known as capital allowance.  By means of capital allowance, business owners can offset the acquisition cost of assets on a graduated scale in accordance with the specific principles of the regime in question.  This is in effect a deductible expense, which ultimately minimises yearly tax liability.  There is a particular benefit in that many regimes allow an accelerated relief for business assets.  This can be exploited to an extent by acquiring assets through the business, for example a car, which can also be used for personal purposes.  Rather than buying a car from personal income, buying it through the company allows you to offset the amount of the expense quickly against your business profits, which ultimately reduce your liability to tax.

Before embarking on any tax reducing strategies, it is important to ensure you are acquainted with the specific laws of your jurisdiction to avoid running into trouble with the authorities.  In some of Europe, for example, there is a requirement to declare any specific tax minimising strategies to the government to allow for rectification of loopholes.  It is important to ensure you are acquainted with the specific laws to avoid potential criminal liability as a consequence of ignorance.  By familiarising yourself with the laws in your jurisdiction, you can avoid the potential pitfalls and create a tax planning strategy that provides the most cost effective solution for you and your small business.

Taxation Law for the Sole Trader

They say the only things in life that are certain are death and taxes.  For the sole trader, this is definitely the case, and at times it can seem like an overbearing pressure.  Thankfully, for the sole trader there are many ways in which you can minimise liability to income tax and leave more in your bank account at the end of the month.  In this article, we will look at some of the key features of tax management from the perspective of the sole trader, and some of the ways in which the sole trader can minimise the legal consequences of his operation.

As a sole trader, you are usually accountable for your profits in terms of income tax.  This can be particularly problematic, given that the structure of income tax in most jurisdictions is a fairly heavy burden on the citizen, particularly those with higher incomes.  The first thing that should be considered is incorporation.  As a corporate entity, you will be required to handle more paperwork, but ultimately it will save you money.  Corporation tax on profits is lower than income tax in the majority of situations, and dividend income carries less taxable weight than other income, for example wages and salaries.  The first thing to do, as a sole trader within the top income tax bracket, is to incorporate, which could potentially save thousands every year.

The sole trader must be aware of the fact that there are certain items that cannot be discounted from income.  In fact, certain everyday items must be declared and must give rise to tax.  For example, say a self-employed solicitor is given a bottle of fine wine by a particular client every year as thanks for his service.  This wine, although not initially apparent, will usually require declaration for tax, on the basis that it is an ongoing gift or benefit arising from employment.  It is therefore important to watch what is included and what is ignored from your tax return.  If you are at all unsure, it is better to include an item and pay tax, rather than running the risk of neglecting to mention its existence.  Alternatively, it may be a good idea to consult a specialist on the particular laws of your jurisdiction, and to determine whether or not it would be possible to avoid liability.  

Another important thing to remember is that there may be certain personal capital gains liability for disposal of a primarily business asset.  As a sole trader, this means you will be liable to account for the disposal of the asset and any capital gains at market value, which can be a costly business.  Again, it is probably advisable to consult a tax lawyer or tax adviser to minimise liability on disposal and to manage your tax liability more effectively.

Tax law is a particularly intricate area of the law, and one that is in perpetual change.  This means the small business owner is required to keep one eye on tax developments to avoid being caught out, which means there is less room for focus on the core areas of business and making money.  Alternatively, the advice of a tax specialist can be invaluable in minimising overall liability and ultimately saving money from your tax bill every year.