Under Capitalization - Financial Planning and Administration, Business Economics & Finance Video Lecture | Business Economics & Finance - B Com

this is David Parker with the law office
of David Parker and another entry on my
video blog small business owners should
beware of undercapitalization
there have been a number of cases
recently in which the corporate veil was
broken and a sole proprietor found
liable out of his personal funds
primarily due to undercapitalization
business owners should not rely on
limited liability without taking
adequate precautions and making sure
they are adequately capitalized for
their operations and obligations limited
liability protects the owner of a
corporation by separating the
Corporations funds from personal funds
so that liability is normally limited to
the assets of the corporation however it
is not a perfect defense and for
purposes of New York estate planning as
well as other reasons this should be
kept in mind in Bogosian versus all
american concessions Marty Rosen the
owner and sole shareholder of the sole
owner corporation all american
concessions discovered this to his
sorrow as reported in forbes the problem
was under capitalization combined with
failure to obtain proper insurance as
his contract required in 2005 the United
States Tennis Association signed a
contract with restaurant associates to
provide concessions for the u.s. open
restaurant associates subcontracted the
beverage side of the concessions to all
American concessions all American was
required to obtain insurance as a
condition of its contract with
restaurant associates but Rosen failed
to do so a class-action suit against all
three companies USTA restaurant
associates and all American hit
restaurant associates for ninety two
thousand dollars are a saw payments from
All American and Rosen declined to pay
naturally enough RA sued all American
and sought to pierce the corporate veil
and seek compensation from Marty Rosen
in his own name this effort succeeded in
Rosen not just all American was found
liable for ninety two thousand dollars
Rosen did a number of things wrong that
other small businesses owners should be
aware of and avoid he did not keep
paperwork in records
she should have and so was unable to
provide documentation during discovery
but the biggest mistake he made was to
fail to provide sufficient capital to
the corporation to cover operations and
obligations the additional failure to
purchase proper liability insurance
which would have covered the obligation
from the class-action suit leaving Rosen
out only the insurance premiums left all
American with insufficient funds to
cover its obligations in the matter the
corporate veil is a powerful defense but
courts tend not to look with favor on a
sole proprietor who hides behind it to
avoid contractual obligations or
responsibility to the public but under
capitalizing the corporation New York
asset protection can suffer badly not
just in terms of corporate assets but
privately held assets as well owners
should bear this in mind and make sure
the corporation is endowed with
sufficient resources to cover any
reasonable contingencies this is David
Parker with the law office of David
Parker I'm an estate planning and elder
law attorney this is David Parker with
the Law Offices of David Parker and
another entry of my video blog the
million dollar list Indiana University
Center on philanthropy has created a
free searchable database the million
dollar list it's a reference of over
60,000 charitable gifts each of them
totaling 1 million dollars or more and
made since the year 2000 the million
dollar list is a database compiling all
available information on publicly
announced charitable giving worth a
million dollars or more the data are
organized into charts according to
several metrics you can search it by
state by type of organization receiving
the gift or by the names of donors the
list allows identification of
geographical patterns or of what types
of organizations are over or under
representative you can tailor your own
giving accordingly for the most
beneficial effect to your New York asset
protection and support for your favorite
causes as charitable giving can be an
important tool for New York estate
planning information related to
charitable giving is especially useful
or you can take cues from the
philanthropy of the famous
if you prefer to do that Warren Buffett
and Bill Gates senior and junior and
family lead the list of givers not
surprisingly here are some of the
interesting statistics that can be found
by searching the million dollar list 70%
of all million-dollar gifts are made by
individuals not by corporations almost
7,000 of the gifts were made by people
who made only that one gift of a million
dollars or more these tended to be the
larger gifts totaling almost 40% of the
dollar amounts but only 11% of the gifts
an article in Forbes offers additional
information the million dollar list can
be an a formative tool to help
understand how charitable giving works
in practice when done in a big way this
is David Parker with the Law Offices
David Parker I'm an estate planning and
elder law attorney this is David Parker
with the Law Offices of David Parker and
another entry in my video blog Medicare
enrollment window opens early this year
time once again to a roll for Medicare
this year though enrollment opens about
a month earlier than usual
surveys show that many seniors don't
know this don't miss this window kaiser
Health News reports a recent survey of
seniors in Florida in which nearly
two-thirds of those surveyed were
unaware of the change to the Medicare
enrollment window this year the open
enrollment period is now October 15th
the December 7th failure to obtain the
Medicare card by the end of open
enrollment can leave seniors in the
predicament normally suffered when it's
not obtained by January 1st which means
that being a creature of habit can be a
problem this year especially if you tend
to leave things until the last minute
just remember to enroll for Medicare by
Pearl Harbor Day a date most of those
eligible for Medicare can easily keep in
mind and you'll be fine the earlier open
enrollment window is one of the several
changes to the program arising from the
Patient Protection Affordable Care Act
ACA the details of Medicare plans have
been changed and the number of plans to
choose from reduced the intent is to
make the selection of
Medicare plans easier for seniors or
their caretakers just as with the open
enrollment date many seniors leave the
same Medicare plan in place year after
year out of habit this is not a good
year to do that better to review the
available plans carefully and be sure to
pick the plan that will work best for
you where the seniors in your care
picking the right plan for your expected
expenses can save you hundreds or even
thousands of dollars because of this
seniors concerned about New York asset
protection and New York planning should
pay special attention to those changes
to the Medicare program I'm David Parker
with the Law Offices of David Parker I'm
an estate planning and elder law
attorney check out my other videos at
parker trust law com2 give is to receive
the benefits of a charitable remainder
trust I'm David Parker with the Law
Offices of David Parker and this is
another entry on my video blog a
charitable remainder trust CRT is an
irrevocable trust for the benefit of a
charitable cause into which you can
transfer assets or investments and from
which you can derive income for life or
a fixed-term not greater than 20 years
if set up for life the trust can be
extended to the lives of your children
or even your grandchildren the trust
takes advantage of the nonprofit status
of its beneficiary the rules governing
CRTs are found in IRS Code section 664
you might say that a CRT is the gift
that keeps on giving or perhaps more
accurately it's the gift that goes on
giving back a CRT is a way to have your
cake and eat it too with this instrument
you can give money to a charitable cause
while at the same time investing it and
enjoying the fruits of the investment
the CRT can provide substantial tax
savings as well as the satisfaction of
charitable giving while aiding an income
management and New York estate planning
as far as taxes are concerned the
important thing about a CRT is that it
allows for flexibility in planning for
the uncertain future the returns are
like those on any other investment which
in this economy tend not to be all that
impressive as a result the tax benefits
may not be all that impressive either
however we can't be sure what the future
holds in the way of Taxation there's a
lot of public pressure on Congress to
raise the top marginal tax rates and
close existing tax loopholes and
deductions beneficial to corporations
and those of high incomes we cannot know
what will happen as a result of next
year's election or what the government
may do in response to the current crisis
both economic and fiscal that beset the
nation and the government itself the
government remains divided on the other
hand the Bush tax cuts may be allowed to
expire this requires no new government
action at all and this would raise the
capital gains tax rate from 15% to 24%
at that point the tax savings from a CRT
would become very substantial indeed
making an important tool for New York
asset protection one thing to remember
is that a CRT is an irrevocable trust
once created it can't be dissolved it
will careful consideration of the
options and consulting legal counsel are
therefore recommended this is David
Parker with the law office of David
Parker I'm an estate planning and elder
law attorney charitable giving in an
estate this is David Parker with the law
office of David Parker and another entry
in my video blog using a part of your
state to help charitable causes you
believe in can leave a legacy of helping
out others patronizing the arts or
scientific research or furthering other
worthy goals it works a little
differently than charitable giving in
life giving to charities during life is
something that most successful people
feel a desire to do you can share one's
own success and good fortune giving that
fortune forward it can help causes and
activities that one believes in from
helping out those who are less fortunate
to supporting the Arts and Sciences to
helping a favorite social cause
charitable giving is often also
tax-deductible and an aid to New York
estate planning with the state of the
economy and politics at this time though
donors may want to be more cautious than
usual only the largest estates over 5
million are liable for the payment of
estate taxes but there is talk in
Congress of changing that changes in the
ikan income tax code may also be
expected although exactly what chain
just can't be predicted either to income
and capital gains taxes or to estate
taxes for all these reasons involving
New York asset protection it often makes
good sense to defer at least some
charitable giving reserving it and
including it in of a quest or trust in
one's a state the quests represent a
decision that isn't final until death
you can adjust your will to accommodate
changes to tax laws or circumstances as
appropriate but queefing an IRA to a
charitable cause may be especially
desirable a charity being tax-exempt
does not have to pay income tax on IRA
distributions as your heirs would have
to depending on the type of asset there
are many different vehicles and methods
for leaving of a quest to charity this
is David Parker with the law office of
David Parker I'm an estate planning and
elder law attorney