Author - Beau Ruff

Per Stirpes or Pro Rata? You probably want Per Stirpes

Periodically checking and updating beneficiary designations on retirement accounts and life insurance is prudent. The next time you navigate the online portal or the old school paper form to write in your updated beneficiary selection, look a little harder at some options you may have previously overlooked. Often, the beneficiary selection is paired with a radio button (online) or a checkbox (paper) that allows you to choose if the named beneficiary’s distribution is per stirpes or pro rata. Which should...

How to Avoid the Death Tax

As Benjamin Franklin once said, “In this world nothing can be said to be certain, except death and taxes.” Taxes come in a wide variety of flavors (e.g., income taxes, property taxes, sales taxes, and gift taxes). But, perhaps one of the most misunderstood taxes is colloquially called the “death tax” – more appropriately called the “Estate Tax.” Critics call out the inherent unfairness of a tax that appears to tax assets that have already been taxed at least once...

Loans Against Investment Accounts

Though most Americans have at least a passing understanding of the ability to use the equity in a house to obtain a low-interest loan though a Home Equity Line of Credit (HELOC), a lesser-known option for obtaining a quick line of credit financing might offer more compelling benefits for some. The financing option is available to individuals or businesses that maintain a non-retirement investment account and may provide lower rates than comparable HELOCs with the potential for faster processing times. The...

Co-Signing Liability

On occasion, you or someone you know might be asked to co-sign a financial obligation for the purchase of a car or a house or the lease of an apartment or commercial space. Sometimes the request is simply to co-sign on a personal loan, so the borrower has access to needed funds. More often than not, this request is made by family and friends. But what are the risks? Is there a better alternative? Though the term “co-sign” does not have...

Selling the Family Business to Children

Parents that have built a successful business and have raised capable children might find the proposition of selling the family business to the children compelling. As with so many decisions in life, this proposition comes with pros and cons, but properly structuring the transaction is always vital. At the outset, the parents must take a hard look at the business and the real prospect of a qualified heir apparent to take over the business. The reality is that only 30% of...

How Do Blended Families Structure Their Wills?

When people come together and vow to spend the rest of their lives together in wedded bliss, they sometimes bring to the relationship a child or children from a previous relationship. Maybe after the union, the couple shares a child of their own in addition to the children from previous relationships. This is the typical “his, hers, theirs” family scenario. This article looks at some planning issues to consider when structuring a Will for a blended family. The threshold question is...

Remove Beneficiary Designations on Non-Retirement Accounts

Non-retirement investment accounts are often set up with wealth management firms. When the account is set up, there is an option to put a beneficiary designation on the account and oftentimes the account is then designated as a TOD (Transfer on Death) or a POD (Payable on Death) account. With this type of designation, it allows the asset to transfer to the named beneficiaries at death without the necessity of probate. The customary advice is that this is an efficient...

Reasons to Reconsider the Roth IRA

In the old days, the decision to fund a retirement account with pre-tax dollars (Traditional IRA) or fund it with after-tax dollars (Roth IRA) often hinged on when a person predicted his income would be highest and thus the tax savings greatest. So, if a person thought his or her income was high now and would go down in retirement, then he might choose a traditional pre-tax retirement investment to save on taxes now. If a person thought income would...

Moving Out of State to Avoid the Washington Estate Tax

Washington state estate tax got you thinking of moving away? Maybe other things have you thinking of relocating and the estate tax is just the straw that broke the camel’s back. Perhaps you are lucky enough to own a second residence in Arizona or another state and think you can just spend a little more than half your time at your second residence to avoid the estate tax. The analysis is more nuanced for both the tax issue and for...

Non-Compete Agreements

Several years ago, this author previously wrote a piece for the Journal of Business on non-compete agreements. Much has changed since that article and it’s time for employers to reconsider their employment agreements that include non-compete clauses because the enforceability of such covenants has been significantly curtailed. In the olden days (prior to 2019), the analysis of the enforceability of a non-compete agreement rested on an analysis of whether the non-compete provisions were reasonable and whether the agreement otherwise complied with...