Wissbrun and Lakritz, P.C. West Bloomfield Michigan
Wissbrun and Lakritz, P.C. and our predecessor firm have been serving clients for over 30 years. Our clients represent a cross section of small businesses and individuals. We pride ourselves in conducting in-depth interviews to determine our client’s needs and concerns, then we design comprehensive, cost efficient solutions that are completed on a timely basis. We serve clients throughout the state of Michigan including the Upper Peninsula, and Michigan based clients with personal or business interests in the State of Florida. We offer tax planning, business planning, and estate planning to individuals and small business owners.
Estate Planning West Bloomfield Michigan
The objective of Estate Planning is the orderly distribution of inherited assets. It is accomplished with a variety of documents briefly described below.
Last Will and Testament West Bloomfield Michigan
A person's Last Will and Testament is a distribution document. It transfers the person 's (Testator or Testatrix) personal effects, personal property such as bank accounts, and real property such as a residence, rental property, and vacant land titled in the sole name of the person. It requires the opening of an estate with the local Probate Court in the county in which the individual resided at the time of death. If minor children are involved, the Last Will and Testament names a Guardian(s), subject to Probate Court approval.
Revocable Self-Trusteed Trust West Bloomfield Michigan
This estate planning document distributes a person's property. However, it is not subject to Probate Court approval unless there is a contested matter. Assets are titled in the name of the person as Trustee and are distributed according to the Trust provisions. The Trust can provide for a complex distribution of assets to various beneficiaries. An additional benefit is that the distributions can be age based. For example, a Trust but not a Will can make distributions to the decedent 's children based on various attained ages, such as one-third (1/3) distribution of Trust assets when a child reaches age 25, one-half (1/2) of the remaining Trust assets at age 30, and the rest of the Trust assets at age 35. There are tax deferral advantages and creditor and beneficiary protections not available in a Last Will and Testament.
Irrevocable Life Insurance Trust West Bloomfield Michigan
For higher net worth individuals, an Irrevocable Life Insurance Trust (ILIT) can exclude assets from federal estate taxation that have been titled in the Trust. This Trust is sometimes referred to as an Asset Replacement Trust. It can be funded by a life insurance policy equal to the estimated federal estate tax liability, and therefore replace the federal estate tax assessed against the decedent's assets that are not included in the ILIT.
Durable Power of Attorney West Bloomfield Michigan
This estate planning document appoints a person or several persons to act as an individual's attorney-in-fact. It empowers the attorney-in-fact to make financial decisions on behalf of the person. The named attorney-in-fact has these powers either immediately when the Power of Attorney is signed or only after there has been a determination that the person is no longer capable of conducting his or her business or financial affairs. This Durable Power of Attorney survives the person's incapacity and is terminated at death. Use of this Durable Power of Attorney avoids the appointment of a Conservator by the Probate Court.
Durable Power of Attorney for Personal, Medical, and Mental Health Care West Bloomfield Michigan
This document appoints a patient advocate to make medical and health related decisions only when the person (patient) cannot communicate his or her intent regarding medical decisions. Once the person's ability to communicate his or her intentions is restored, the patient advocate's powers are suspended. Use of this Durable Power of Attorney avoids the appointment of a Guardian to make medical and mental health care decisions.
Health Care Declaration West Bloomfield Michigan
This document provides the patient advocate with end-of-life decisions when the person is in a coma or in a terminal health condition. It provides the patient advocate guidance in dealing with health professionals in the above referenced medical conditions. It is often referred to as a “living will.”
HIPAA (Health Insurance Portability and Accountability Act of 1996) Disclosure Authorization West Bloomfield Michigan
This document lists the person or persons that can have access to the patient's physician(s) and hospital medical records. It is an authorization allowing the named individuals to obtain medical information from all third party health care providers. This authorization is effective even if the patient is able to make all medical decisions. The purpose is to assist the patient to obtain medical and health care information.
Private Foundation West Bloomfield Michigan
This entity in the form of a Corporation or a Trust is funded by part or all of an individual's assets to provide a perpetual fund for the exclusive use of religious, charitable, scientific, or educational purposes. This sponsor of the Private Foundation applies to the Internal Revenue Service for an exemption letter. An IRS approved Private Foundation is not subject to federal income taxation and qualifies for contributors to the foundation to obtain income tax deductions.
Charitable Trust West Bloomfield Michigan
A Charitable Trust can be part of a comprehensive estate plan where a portion of an individual’s Trust assets are separate from the rest of the estate plan. It can take the form of a Charitable Unitrust or an Annuity Trust which provides income to individuals during their life with the Trust assets distributed to a charity at the death of the lifetime beneficiary. There are also Charitable Lead Trusts which provide income to a qualified charity for a designated time period with the trust assets distributed to non-charitable beneficiaries at the expiration of the charitable income term period.
Antenuptial (Prenuptial) Agreement West Bloomfield Michigan
This estate planning document is a contract between two persons who intend to get married. It identifies how the assets are titled before the marriage and what, if any, changes to the title of these assets will be made during the marriage. It also addresses ownership issues of assets acquired during the marriage. To be enforceable, the terms of the agreement must be reasonable, there must be a full financial disclosure by both parties, each party must be represented by an attorney, and the Antenuptial Agreement should be entered into well before the intended date of marriage.
Special Needs Trust West Bloomfield Michigan
This estate planning document is a special form of Trust where the beneficiary is qualified to receive various federal, state, and/or local Government benefits. The Trust is drafted so that the Trustee has complete discretion to distribute or not distribute Trust income or principal to the beneficiary. The purpose of this Trust is to provide access to additional assets to enhance the beneficiary's quality of life but not jeopardize the continued receipt of government benefits.
Retirement Benefit Trust West Bloomfield Michigan
This is a form of Trust which guarantees the beneficiary an annuity for life. It is funded by the receipt of the Required Minimum Distribution of retirement assets that reside in a custodial account such as an Individual Retirement Account (IRA). The beneficiary receives an annual distribution based on his or her life expectancy. Flexibility is built into this Trust to provide for financial and medical emergencies. It works well when it is used with the outright distribution to the beneficiary of non-retirement assets.
Joint Trust West Bloomfield Michigan
This type of estate planning document is a Trust titled in the name of two or more grantors who are the Trustees. It is used for individuals with modest estates and no federal estate tax liability who want to avoid the probate of their assets. During the lifetime of the grantors, it is revocable or can be amended only when all grantors consent. At the death of one grantor, it can either become irrevocable or remain revocable depending on the agreement of all the original grantors.
Estate Planning Interview West Bloomfield Michigan
We invite you to listen to Kenneth's radio interview on Estate Planning. Topics discussed are the advantages of using a Trust, the disadvantages of Probate, explaining the use of Special Needs Trusts, Medical and Financial Powers of Attorney, and a brief overview of Antenuptial (Prenuptial) Agreements.
Kenneth's Radio Interview: Listen
Tax Planning West Bloomfield Michigan
The purpose of Tax Planning is to minimize our client's business tax, personal income tax, corporate tax, estate tax, gift tax, and generation skipping tax liability. This is accomplished by utilizing the various tax strategies addressed in the Business Planning, Business Acquisitions and Business Sales, Estate Planning, and Retirement Planning sections of this website.
As former Internal Revenue Services Employees, we understand the administrative system. The Examination (audit) Division has certain goals and guidelines which govern its ability to reach agreements with taxpayers. Sometimes we can resolve issues by meeting with an examination employee's group manager. If this fails we move on to the next administrative level.
The Appeals Division has different goals and guidelines that it relies on to recommend settlements. The Appeals Division considers "Hazards of Litigation" in settling cases. We review the statutes and case laws with an Appeals Officer. We have been very successful in resolving most tax matters at this level.
On occasion, we represent clients on other matters before the Internal Revenue Service as follows.
- Offers in Compromise where we negotiate a reduction in taxpayer liabilities and penalties
- Tax Court Petitions
- Collection matters involving Income, Payroll, Trust Fund, Social Security and Penalty Issues
Retirement Planning West Bloomfield Michigan
We have extensive experience in preparing Profit Sharing Plans and 401(k) Plans for our clients. We have spent years developing these plans and our customized plans have been pre-approved by the Internal Revenue Service. A company adopting one of our plans can be assured that the plan will be accepted by the Internal Revenue Service after submission. Review a copy of our Internal Revenue Service Advisory letter dated March 31, 2014
Internal Revenue Service Advisory Letter Read More
We begin the analysis of determining the best type of retirement plan by working with the client and the client's accountant to ascertain the amount of business income the client can reasonably afford to contribute to the plan on a yearly basis. Then we work with the accountant, plan administrator, and plan actuary to design a retirement plan that satisfies the client's objectives. The retirement plan designs are flexible so that the plan can accommodate change in business income available for contribution to the plan.
Profit Sharing Plans and 401(k) Plans provide important retirement opportunities. West Bloomfield Michigan
Typical Advantages Of Profit Sharing Plans West Bloomfield Michigan
- Tax deductions for sponsoring company contributions and employee deferral of income
- Tax deferral on the income earned in an employee's account
- Flexibility- contribution, no contribution, or a varying contribution amount
- Availability for each employee to choose his or her own account investments
- Ability to borrow from the employee's account
- Hardships withdrawals by the employee in times of need
Different Types of Profit Sharing Plans West Bloomfield Michigan
Uniform Contribution Profit Sharing Plans West Bloomfield Michigan
These Retirement Plans are the most straight forward. All participants receive the same percentage of their compensation. Example: 10% of an employee's compensation each year is contributed to the employee's account.
Integrated Profit Sharing Plans West Bloomfield Michigan
This is a Retirement Plan with a contribution formula that takes into consideration the employer's contribution to social security on behalf of the employee.
In other words, the employer gets "credit" for contributing to the employee's social security by being permitted to use a contribution formula that takes into account compensation below and above the current year's social security taxable wage base.
This formula has the effect of increasing the contributions to be made by the employer to the more “highly compensated employees” which are the business owner(s).
New Comparability | Cross Tested Profit Sharing Plans West Bloomfield Michigan
This Retirement Plan design considers the factors of the employee's job classification and employee’s age. The Plan is permitted to assign different contribution rates or percentages to the various classifications (Example- physicians, physician's assistant, secretary, dentist, dental hygienist, hourly employee, salary employee).
Since the Internal Revenue Service prohibits the discriminating of contributions to the "highly compensated employees", these Plans must pass certain tests on an annual basis. The tests are done by the plan's actuary to insure compliance with the law.
The purpose of the plan design is to increase plan contributions to the "highly compensated employees" and older employees to a greater extent than could be contributed under the Uniform Contribution Plan or the Integrated Profit Sharing Plan.
Different Types of 401(k) Plans West Bloomfield Michigan
If a Profit Sharing Plan is not suitable for an employer the employer can establish a 401(k) Plan. Also, the 401(k) Plan can be added to the Profit Sharing Plan to increase the contribution allocation to the highly compensated employees. Just like the Profit Sharing Plans, there are different types of 401(k) Plans.
Non-Contributory 401(k) Plans West Bloomfield Michigan
This type of 401(k) Retirement Plan is funded entirely by the employee. There is no employer contribution. The advantage is that the employer has no required contribution. The disadvantage is that contributions of the highly compensated employees of the company are limited by the amount of deferred compensation elected by the lower compensated employees of the company. In addition, each year this type of 401(k) Plan requires that it pass what is call non-discrimination testing to be sure the highly compensated employees of the company have not exceeded the 401(k) Plan contribution limit.
Safe Harbor 401(k) Plans West Bloomfield Michigan
The primary benefits of the Safe Harbor 401(k) Retirement Plan are that there is no annual non-discrimination testing and the highly compensated employees of the company can defer up to the dollar limit, which can change annually regardless of how much or how little the other employees defer in their 401(k) accounts.
The tradeoff for the increased amount of deferral is that the company has to contribute either 3% to each employee’s 401(k) account or match up to a maximum of 4% the employee's compensation that the employee defers. If the employee does not defer part of his or her compensation, under a matching plan the company is not required to defer and yet the highly compensated employees can still defer up to the maximum annual dollar limit.
Additional requirements provide that all employer contributions are immediately 100% vested, there is no 1,000 hours of employment for each plan year required for employer contributions, and the employee does not have to be employed on the last day of the plan year to qualify for an employer contribution.
If an employee is over the age of 50, an additional contribution, called a "catch up" can be made on a yearly basis.
Click these Links to review the firm's Internal Revenue Service Advisory Letter and the Uniform Lifetime Distribution Period Table which provides information on the Required Minimum Distribution once a person reaches the age of 701/2.
Internal Revenue Service Advisory Letter Read More
Uniform Lifetime Distribution Period Table Read More
Probate And Estate Administration West Bloomfield Michigan
Probate is the orderly distribution of the decedent's assets that are titled in the sole name of the deceased individual. To a greater or lesser extent, depending on the type of Estate Administration, it is administered under the jurisdiction of the Probate Court. Generally, the estate is administered in the county that the deceased resided in at the time of death.
If there is a Last Will and Testament, Estate Administration is conducted under the terms and conditions referenced in the decedent's Last Will and Testament. A Personal Representative that the decedent named in the Last Will and Testament petitions the Probate Court for admission of the Will. It is the Personal Representative's legal responsibility to administer the estate in accordance with the decedent's instructions under the Last Will and Testament.
If a decedent died without a Will, the State of Michigan has statutes that provide for the distribution of assets in accordance with the surviving relatives of the decedent. This is called Intestate Succession and is governed by the following Michigan Statutes:
- MCL 700.2101 Read More
- MCL 700.2102 Read More
- MCL 700.2103 Read More
- MCL 700.2104 Read More
- MCL 700.2105 Read More
Estate Administration requires the filing of a number of documents in order to properly transfer the assets of the decedent's estate to the distributees referenced in the Will or the heirs as designated under the Michigan Intestate Statutes. Some of the documents filed in Probate Court to proceed with Estate Administration are as follows:
Petition For Probate And/Or Appointment Of Personal Representative West Bloomfield Michigan
This is the initial document filed with the Probate Court. It provides information about the decedent such as an estimate of the value the probate estate, the names of the heirs or distributees, and information about the Last Will and Testament.
Acceptance Of Appointment West Bloomfield Michigan
The nominated Personal Representative accepts appointment and submits to the personal jurisdiction of the Probate Court.
Testimony To Identify Heirs West Bloomfield Michigan
This document provides verification of the decedent's family status
Bond of Fiduciary West Bloomfield Michigan
The Personal Representative is sometimes required to file a bond to guarantee proper Estate Administration and proper distribution of the decedent's assets in accordance with the Last Will and Testament or the Michigan Intestate Statutes.
Notice Of Appointment And Duties Of Personal Representative West Bloomfield Michigan
The Personal Representative must send a Notice of Appointment and Duties of Personal Representative form to all interested parties.
Notice To Creditors West Bloomfield Michigan
Probate statutes require the Personal Representative to publish a Notice to Creditors in a newspaper in the County of Estate Administration that lists the name and address of the decedent. The notice also lists name and address of the Personal Representative. Creditors of the estate must file their claims against the estate with the Personal Representative.
Inventory West Bloomfield Michigan
An inventory of the assets which lists fair market value of the assets at the time of the decedent's death must be presented to the Probate Court. The Probate Court computes an inventory fee payable to the Probate Court based on the fair market value listed on the inventory.
Account Of Fiduciary West Bloomfield Michigan
The Personal Representative must file an annual Account of Fiduciary Form each year the estate is administered. This account summarizes the income received during the year and the disbursements made during the year by the Personal Representative for that one year period.
Schedule Of Distributions And Payment Of Claims West Bloomfield Michigan
Once the estate is ready to be distributed, the Personal Representative must file a Schedule of Distributions and Payment of Claims form. This lists amounts to be paid to creditors, distributees and heirs at law. It also lists the date of the distribution.
Order For Complete Estate Settlement West Bloomfield Michigan
Once distributions are completed and claims have been paid, the Personal Representative files an Order to close the estate administration.
Order Of Discharge West Bloomfield Michigan
Once the Order for Complete Estate Settlement has been entered, the Personal Representative must file an Order of Discharge of the Personal Representative. This discharges the Personal Representative and cancels the requirement of a Bond of Fiduciary.
Certificate Of Completion West Bloomfield Michigan
The Personal Representative files a Certificate of Completion with the Probate Court. The purpose is to formally close the Estate Administration.
Business Planning West Bloomfield Michigan
The objective of Business Planning is the orderly management of various business entities. We provide professional services to Corporations, Limited Liability Companies, Partnerships, and Sole Proprietorships. The advantages of the Corporate and Limited Liability forms of business are the limited personal liability to the owners and the ease of the transfer of ownership of the business entity.
We accomplish the goal of business planning by meeting annually with our business clients. We like to meet during the last month of the entity's fiscal year. We meet with the client, the accountant, and the investment advisor to review financial statements that summarize the first eleven months of the entity's fiscal year.
Entity Formation and Maintenance of Records West Bloomfield Michigan
For Business Planning with Corporations we prepare the following:
- Articles of Incorporation - This lists the name of the Corporation, the purpose of the Corporation, the number and class of shares to be issued, the name of the resident agent and address of the registered office, and the name(s) and address(es) of the incorporator(s).
- By Laws - These describe the internal management of the Corporation.
- Shareholder Minutes - These appoint members of the Board of Directors.
- Board of Directors Minutes - These appoint the President, Vice President, Secretary, and Treasurer who actually run the day to day operations of the Corporation.
- Shareholder Certificates - These documents identify the respective ownership of the business entity.
Michigan law requires each Corporation to have an annual meeting of the shareholders. The shareholders appoint the Board of Directors who in turn appoint the officers to run the Corporation.
For Business Planning with Limited Liability Companies (LLC's) we prepare the following:
- Articles of Organization - This lists the name of the LLC, the purpose of the LLC, and the name of the resident agent and address of the registered office.
- Operating_Agreement - This outlines the internal management of the LLC.
- Member Minutes - These identify the owners of the business who in turn appoint the managers to run the business.
- Manager Minutes - These summarize and approve the activity of the business as conducted by the managers.
- Unit Certificates - These documents are the equivalent of Shareholder Certificates and identify ownership of the business entity.
Business planning requires detailed Corporate and Limited Liability records which are important for Internal Revenue Service audits, Michigan Department of Treasury audits, and other various government examination of the books and records of a business.
Business Aquisitions And Sales West Bloomfield Michigan
Representing purchasers and sellers of businesses requires the understanding of the business. It also requires the understanding of the relationships between the parties which is often opposite of each other. Sellers want a cash transaction. Purchasers want an instalment sale with offsets against unknown factors. Sellers want to give minimal representations and warranties. Purchasers want maximum representations, warranties, and indemnifications. Sellers want no or a limited covenant not to compete. Purchasers want covenants not to compete that provide maximum protection. Once the purchase price has been agreed to, sellers and purchasers often differ on the allocations of the purchase price of the assets purchased since these allocations have different tax consequences to the seller and the purchaser. In addition to the Purchase Agreement, what follows is a list and brief description of some of the additional documents we prepare that are part of the acquisition and sale of a business:
Confidentiality Agreements West Bloomfield Michigan
Potential purchasers expect to receive financial information in the form of balance sheets and profit and loss statements. In addition, tax returns and patient, client, and customer lists are often reviewed to evaluate the purchase price of a business acquisition. Confidentiality Agreements are signed to limit the distribution of the potential financial information to third parties other than the purchaser's attorneys, accountants, and business consultants for their review and evaluation. In addition, patient, client, and customer lists are redacted to maintain the confidentiality of these individuals but still provide information about the patient, client, and customer list to the prospective purchaser.
Covenants Not To Compete West Bloomfield Michigan
The purpose of the Covenant Not To Compete is to protect the purchaser of a business. It prevents the seller of the business from competing with the purchaser for a specified time period and within a specific geographical area if it is a brick and mortar business. If the business is internet based, the restrictions are often tailored to customer lists.
It includes damage provisions in the event the seller breaches the Covenant and it also provides injunctive relief to prevent the seller from conducting the same type of business within the time period, the geographical area, or the internet restrictions that have been agreed to between the purchaser and the seller.
Promissory Notes West Bloomfield Michigan
In the event that the purchase price is not paid in full at closing, the purchaser will sign a Promissory Note which provides for the terms of payment. This will include the length of time to pay the purchase price. It will also specify the interest rate that the purchaser must pay for the installment purchase of the business and an acceleration of the Promissory Note in the event of a breach of payment.
Security Agreements West Bloomfield Michigan
When the purchase price is not paid in full and a Promissory Note is signed, the seller of the business will obtain specific rights to the assets of the business that have been sold. This provides priority of payment over specific business assets which provide the seller with preferences over and above other business creditors. For example, the seller may take a Security Agreement in the accounts receivable and equipment of the business so that in the event of a default the seller has priority over these assets.
Uniform Commercial Code (UCC) Financing Statements West Bloomfield Michigan
The Purchase Agreement permits the seller to file with the State of Michigan and the local Register of Deeds office documents to put the public on notice that the seller has the above referenced security interest in various business assets. This protects the seller by preventing the purchaser from selling or pledging the business assets until the purchase price is paid in full.
Personal Guarantees West Bloomfield Michigan
In addition to having the business sign Promissory Notes, Security Agreements, and Uniform Commercial Code Financing Statements, the seller often wants personal assurances that the purchaser will pay the outstanding balance due the seller. This is accomplished by requiring the purchaser to personally promise to pay the remaining balance due on the purchase in the event the business does not pay or the business becomes insolvent or files for bankruptcy protection.