National Round-up

Delaware Supreme Court gives even odds that sports books can begin operating in the state.

Local Round-Up

Cincinnati Cop indicted on sex and extortion charges.

Kentucky Governor may have to testify in federal court.

Local car dealers challenge the Chrysler bankruptcy.

Cincinnati Councilwoman Laketa Cole thinks it is appropriate to call the city manager and police lieutenant to make sure officers could not be better used elsewhere during a traffic stop.

National Round-up

NASCAR driver will look to courts to have suspension lifted.

Fordham Students put together a 15-page "dossier" on Justice Scalia through internet research. Even without a Facebook profile for the Justice.

Costco may have to reimburse employees for failing to pay wages, in bulk.

Local Round-up

Middletown Property room cop gets one-day suspension lifted and files discrimination suit for treatment during property room condition flare-up (missing guns, cash everywhere, unlabeled drugs, and two fetuses).

Cheviot man has more arrests than Disney has dalmations.

No permit on file for deck that collapsed in Mt. Lookout.

Woman with suspended license held in hit-and-run after asking for judge to release her car from impound lot.

GRAT Expectations

The grantor retained annuity trust (GRAT) is an irrevocable lifetime trust that allows a donor to pass appreciation from assets to heirs free of estate taxes. The appreciation is only subject to a tax-rate set monthly by the IRS. This tool is especially attractive now with stock values, housing values, and IRS rates all relatively low. Homeowners and Wall Street investors should be giving serious thought to establishing GRATs in this fiscal environment.

For all its splendor, the GRAT is a very simple concept. Donors place certain appreciable assets into trust naming children as beneficiaries. Over the term of the trust, regular payments are made back to the donor. These payments are structured so when the trust expires the donor will have received the original value of the assets deposited plus the value of taxes paid. Any appreciation earned then transfers to the beneficiaries at the closing of the trust tax-free.

For a GRAT to properly pass assets tax-free, the trust instrument must create a valid, irrevocable trust with a set number of years. The term of the trust must expire while the donor is still living. If you create a GRAT and die before the term expires, the assets simply fall back into your taxable estate.

The GRAT is a powerful tool for people with large stock holdings, property holdings, or anticipating a large increase in business holding value (i.e. IPO, closed sale of business, etc.), especially in the current economic climate. If you have questions as to whether a GRAT could benefit you and your family, contact an attorney today.

National Round-Up

Mortgage lenders apparently can't make their payments either (at least to lawyers).

Chrysler dealers are circling the wagons, plan to sue if dealerships closed.

New York state joins Washington, Oregon in saying warrant is needed to track suspects via GPS.

A wife can use her husband's old emails in a New York divorce case. Clean out those in-boxes.

Stockbrokers want, and get, more money.

Sportswriter and Attorney Clay Travis unpacks the importance and possible impact of the EA Sports/NCAA lawsuit.

Local Round-up

California Company sues locally-owned Pure Romance.

Can two local women end up in jail after attempting to steal Obama photo? Yes, they can.

Lots of community service and loss of phone privileges for Mason teens caught "sexting." No word on availability of dinner before bed.

Suspect released hours before shooting due to lack of jail space.

Getting Past Partnerships

New businesses sprout up every day. From complex financial institutions to sidewalk concession stands, every business owner has grand designs for where the company is going. While starting a new business is an exciting proposition, it is important to consider the risks involved. Without the proper structure, creditors can go after personal assets to fulfill obligations of the company. To avoid this fate, many businesses chose to file with the state as an LLC or Corporation.

To determine the proper entity for your business, you should contact your attorney and discuss your business structure and future plans in detail so your attorney can choose the proper legal structure for your business. However, as a brief primer, here are simplified descriptions of the most common legal structures in Ohio:

1) Sole Proprietorship: Business entity owned by a single owner. Owner personally takes on all assets and liabilities of the company. Owner's personal assets may be attached to satisfy debts of business. Not subject to many laws and/or regulations concerning other business entities.

2) Partnership: Business entity formed between two or more partners. No filings with the state are required except in special circumstances (e.g. when real estate holdings are involved). While it is not required, many partnerships choose to reduce to writing agreements concerning profit sharing, duties of partners, sale of partnership shares, etc. Once again, personal liability attaches for business debts. Here the ante is raised by the fact that any partner can be held liable for another partner's actions.

3) Limited Liability Corporation (LLC): LLC's are "pass-through" entities, meaning the profits and losses of the business will be reflected on the income taxes of the owner. No separate tax filings are necessary. However, LLC's must file articles of incorporation with the state. Futher, most states have statutory requirements with which an LLC must comply to take advantage of the liability protection. Ohio has a number of statutory requirements, including maintaining certain records in the primary office (tax returns, etc.). These statutory requirements are nowhere near the requirements for S or C Corps. The personal liability protection, the pass-through tax status, and the relaxed statutory requirements combine to make the LLC an attractive entity for small business owners.

4) Corporation: The Corporation is the most complex of all the business entities. It becomes attractive when there are a number of principle investors involved and shares of stock will be issued. Incorporating provides complete protection from personal liability and creates a completely separate legal and tax entity. Statutory requirements range from the simple (shareholder meetings) to the complex (SEC filings and regulations).

Subchapter S election - The corporate entity can elect to be taxed on a flow-through basis through filing a subchapter S election. Losses and gains are reported directly on the individual tax returns.

A big advantage for Corporations is distributions or dividends are not subject to employment tax. This allows for flexibility in compensation of shareholders (salary v. dividend/distribution) depending on what the possible tax advantages may be.

Once again, if you are looking to start a business, contact your attorney! Each situation is unique and should be examined with a professional.

National Round Up

Former Enron CEO Jeff Skilling appeals his conviction for Insider Trading to the US Supreme Court because he feels too much media coverage denied him his right to a fair trial. If the Supreme Court orders a new trial, with this additional coverage, getting a fair trial the second time should be no problem.

Thinking about law school and a big firm job? Push is eventually going to come to shove with deferred jobs, and some classes are going to get left out.

Another factor to consider if you're making that Law School Decision, TaxProf Blog has links to the first ever Law School Quality of Life Rankings. Five way tie for "Least Dateable Student Body."

Full text of President Barack Letterman's comments at the White House Correspondents' Dinner. And here's the video.

Anonymous comments from Attorney reviews of Judge Sotomayor and other possible Supreme Court nominees.

National Round-up

Justice Stevens denies Cleveland man's plea for the Supreme Court to delay his deportation to face war crimes from WWII.

Prosecutors seek 3-year prison term for Mom involved in mySpace hoax that led to suicide.

The Senatorial election in Minnesota continues to . . . drag . . . . . on.

An analysis of the Souter retirement and how that retirement may affect citizens.

Local Round-up

Prosecutors stand behind Hutzel in Widmer murder case.

Kirkland found mentally competent, prosecutor will likely seek death penalty.

Accuser recants, ex-Bearcat Ruben Patterson cleared of rape charges.

Enquirer seeks to have details of settlement agreement released.  'Confidential' agreement read into court record.