What to Do with your Estate Planning Documents

What to Do with your Estate Planning Documents

If you have all of your estate planning documents in order, great job! You’re ahead of many other people who haven’t gotten around to it yet, and your family will have the support and information they need if something happens to you. If you still need to set up some documentation in California, take a look at this checklist to help get you started.

Once your estate planning documents are ready, there’s another crucial step to follow. You need to find a safe place to store them and let your family know how to access them. If you lock the only copy of an important document in a box and hide it under some junk in the attic, your family might not be able to follow through with your instructions when the time comes. The result could be a mess of stressful arguments and litigation.

If no one can find a copy of your last will and testament, the law usually presumes that you destroyed or revoked it. If an older copy is found, it might be used instead. If no version is found, California Intestate Law will determine who is entitled to your property for you. These results might vary considerably from what you had planned.

In 2016, BMO Wealth Management polled 1,008 Americans about the state of their estate planning documents. Only one third of them responded that their heirs knew where the documents were kept, and only a tenth of them had given their heirs a copy! Let’s improve these statistics by making smarter decisions with our important legal paperwork.

Image courtesy of BMO Wealth Management.Secure the Originals

It’s crucial to keep the original copies of your estate planning documents safe. The court may not accept digital or paper copies of the originals, especially in the event of a dispute. Many states also won’t accept copies of healthcare proxy and power of attorney documentation.

Store an original document in its own marked, sealed envelope. This will keep pages from being misplaced or mixed in with other paperwork. A great place to keep these envelopes is in a fireproof, locked safe within your own home. You can let your attorney or bank store them for you, but these aren’t the best options for emergency paperwork that your family might need at a moment’s notice, such as medical proxy documents. State laws and bank policies affect who can access your bank box, even after your death, so make sure that the important documents can reach the family members who need them without requiring court orders.

Provide Copies

Several people should have access to copies of your estate planning documents. Your financial and legal advisors should each have a copy, including your accountant and attorney. These people play a neutral role in your decisions, and can give you and your family good advice, such as when your documents need to be updated. You should also give copies to trusted members of your family, particularly the ones who are listed within the documentation. If you don’t trust them with copies, you need to at least inform them about the location of the originals.

Disclose the Location

In addition to your spouse, you must disclose the location of the original estate planning documents to certain other people. Again, your accountant, attorney, and trusted family members should all be aware of the originals’ locations. This will ensure that the information is available and the documentation can be put into the right hands in the case of an accident that affects both you and your spouse. Also make sure that your close family knows the safe combination, key location, and/or contact information for your attorney so that they can access the documents in a pinch.

Update When Necessary

Depending on how your circumstances change over time, an outdated set of estate planning documents can be almost as bad as no documentation at all. Make sure that you update your will, power of attorney, and other important documents when a major life change occurs. After changes are made, destroy the old documents so that no confusion occurs over your current wishes. You also need to track down and make sure that every copy is destroyed and replaced by the updated version. If you change who you use as a financial or legal advisor, make sure that your new professionals have current documents and your family knows who to contact.

Does your family know what to do in case you have an emergency? Are the originals of your estate planning documents safe and secure? Does each person who needs a copy have an up-to-date version and know how to access the originals when necessary? If you said no to any of these questions, it might be time to reconsider how you are handling your important documents.

At the Law Firm of Hathaway, Perrett, Webster, Powers, Chrisman & Gutierrez, we have handled thousands of estate plans, and we know how to keep your documents safe! We catalog and store your original documents in a fireproof location. We provide an organized copy of your estate planning documents, together with information on what to do when the time comes to use these documents. If you would like more information on how an estate plan can help your loved ones when you are gone, or have estate plan questions in general, call Dan Higson today at 805-644-7111!

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Accidents with an Uninsured Driver in California

Accidents with an Uninsured Driver in California

No matter how carefully you drive, accidents happen. You can’t control every factor around you, such as road conditions and other drivers. The State of California requires that everyone who operates a vehicle must have proof of financial responsibility, such as automobile liability insurance. However, studies by the Insurance Research Council have shown that as many as 1 in 7 drivers are uninsured. Car insurance is supposed to help cover the costs of medical and repair bills, but what happens when there’s an uninsured driver involved?

California Insurance Requirements

There are liability insurance requirements for all private passenger vehicles in California. The minimum requirements follow a 15/30/5 arrangement by covering:

  • $15,000 for injury or death of a single person.
  • $30,000 for injury or death of multiple people.
  • $5,000 for property damage.

An at-fault driver is liable for any claims that exceed these numbers. It’s important to choose the right insurance policy for you when deciding whether or not to stick with the minimum requirements. The California Low Cost Automobile Insurance Program provides a source of relatively cheap insurance.

If you want another option, there are other sources of proof of financial responsibility, such as:

  • $35,000 cash deposit to the California Department of Motor Vehicles.
  • $35,000 surety bond from a company licensed for business in California.
  • A certificate of self-insurance from the DMV.

Uninsured Drivers and Non-Economic Damages

Uninsured drivers in California are barred from receiving compensation for non-economic damages when he or she is the victim of a motor accident. Non-economic damages include:

  • Disability
  • Disfigurement
  • Pain and Suffering
  • Decreased Quality of Life
  • Loss of Wages

The only exception to this rule is if the at-fault driver was under the influence of drugs or alcohol at the time of the accident and was convicted of a DUI.

Uninsured Motorist Coverage

If you are in a collision with an uninsured driver, there are several possible ways to receive compensation:

  • Collision Coverage
  • Medical Payments Coverage
  • Health Insurance
  • File a Lawsuit
  • Uninsured Motorist Coverage

Although you are not required to have Uninsured Motorist Coverage in the State of California, it comes as an option with most insurance. It will help pay your medical bills, economic expenses, lost wages, and non-economic damages in the case of an accident with an uninsured driver. Uninsured Motorist Coverage takes the place of the liability coverage that should have been the at-fault driver’s responsibility. The coverage often has the same limits as regular insurance, but you should check your policy to make sure.

In California, up to 70% of all auto accidents are caused by an uninsured driver. Yet the insurance industry continues to advise their insured members to purchase inadequate uninsured motorist coverage. For many policies, the additional premium for adding $1,000,000 in uninsured motorist coverage is minimal. If you are injured in a car accident due to the negligence of the other driver, that driver will most likely not be uninsured or have a minimum insurance policy.

Bottom line: Get substantial Uninsured Motorist Coverage on your auto insurance policy. It may cost you as little as $30 to $50 dollars per year. It is the best investment you will make, and your insurance company probably won’t tell you about it without prompting.

Making a claim with Uninsured Motorist Coverage is different than a normal claim. Your relationship with the insurance provider changes. You must negotiate a settlement as if you were dealing with another person’s insurance. Because of this, it is a good idea to have an experienced personal injury lawyer represent you in this situation.

The process of filing an insurance claim involving an uninsured driver can be complicated and stressful. Insurance adjusters may underestimate the value of compensation you deserve for injuries and damages. If you are looking to negotiate with an insurance provider after an automobile accident or have other questions concerning a personal injury case, call Dan Higson today. And make sure you get Uninsured Motorist Coverage on your auto insurance immediately!

Payless ShoeSource Files Chapter 11 Bankruptcy

Payless ShoeSource Files Chapter 11 Bankruptcy

Brief History of Payless ShoeSource

Payless ShoeSource is an American discount shoe retailer based in Topeka, Kansas. Cousins Shaol and Louis Pozez established the company in 1956. The stores became more widespread in the 1980’s as a result of its Pro Wings brand. These shoes were notable for the use of Velcro instead of shoelaces. Recently, the company has established over 4,400 locations in more than 30 countries.

As of 2012, Blum Capital and Golden Gate Capital privately own Payless ShoeSource. Unfortunately, the company has struggled in the following years. In 2016, it closed all of its stores in Australia. This destroyed around 730 jobs. On April 5, 2017, Payless ShoeSource filed for Chapter 11 bankruptcy. As a result of the reorganization, the company decided to close over 400 locations within the United States. The closures hit the West Coast hard, since nearly 50 of these failed stores were in California. The timing of store closures depended upon each location. A complete list of Payless ShoeSource closing store locations can be found here.

Chapter 11 Reorganization

By filing for Chapter 11 bankruptcy, Payless ShoeSource will attempt to reorganize the company in order to have a stronger footing going forward. The company plans to reduce its debt by 50% and lower the interest payments. According to Payless, lenders have agreed to pay up to $385 million to keep the rest of the stores operational.

Modern Retail Store Struggles

When asked about the bankruptcy case, Payless ShoeSource Chief Executive Paul Jones stated, “This is a difficult, but necessary, decision driven by the continued challenges of the retail environment, which will only intensify.” In the modern age, many brick and mortar retail stores are seriously struggling. Shoppers tend to make purchases online or at discount outlets. Even discount stores such as Payless ShoeSource are failing to keep up.

2016 and 2017 have been full of bankruptcies and store closures for many companies. Clothing companies are also having problems staying open. Teenage clothing store Wet Seal attempted Chapter 11 reorganization in 2015. However, it completely failed by 2017, closing all locations and terminating all employees. The Limited filed for Chapter 11 bankruptcy in early 2017 and decided to close all brick and mortar locations. The company will continue to provide online sales, but many jobs were lost in the process.

With the rise in online sales and so many stores closing across the United States, it’s hard to imagine a revival of brick and mortar stores and shopping malls in the future. Many of the businesses that want to remain successful will have to adapt to the changing sales environment of the 21st Century. Hopefully Payless ShoeSource can use this Chapter 11 reorganization to find a place for itself in modern retail business.

RadioShack’s Rollercoaster History of Boom and Bankruptcy

RadioShack’s Rollercoaster History of Boom and Bankruptcy

The Beginning

RadioShack is an American chain of electronics stores that has experienced both highs and lows throughout its long history. Brothers Theodore and Milton Deutschmann founded it in 1921 to sell ham radio equipment. The company originally consisted of a single location for retail and mail order sales. RadioShack issued its first catalogue in 1939, and even extended into the high fidelity music market by producing its own private label products with the brand name Realist. Throughout its history, the company constantly attempted to rebrand itself, changing its name, slogan, management, and purpose time after time.

Bankruptcy and Changing Strategies

By the 1960s, RadioShack had expanded its mail order business and had 9 stores. Soon the company fell on hard times, however, and had to file for bankruptcy. Luckily for RadioShack, entrepreneur Charles Tandy took an interest and bought the company for $300,000 in 1962. Tandy Corporation was interested in expanding their leather goods company into other hobby businesses. In order to make RadioShack viable again, Tandy ended the mail-order business and credit sales and dropped most of the upper management positions. Tandy led the ailing company through a period of growth and success in the ‘60s and ‘70s before his death.

In the ‘80s, RadioShack attempted to edge into the IBM PC compatible market. This didn’t last long though, as the company struggled against rivals like Dell. In 1982, people were moving towards owning their own phones instead of renting them after the breakup of the Bell System, and RadioShack jumped on board by offering 20 different models of home phone.

In the ‘90s, RadioShack once again attempted to change, this time having to restructure over 200 store locations. The company wanted to shift away from components and cables towards more mainstream consumer electronics. It continued to do so into 2015 by selling things like cell phones. In 1994, the company began to offer inexpensive, non-warranty repairs for over 45 brands of electronics. In 1998, RadioShack claimed to be the largest seller of consumer telecommunications products in the world. By 2011, smartphone sales accounted for over half of the company’s revenue.

2015 Chapter 11 Bankruptcy

Unfortunately, management issues and tough competition led to several bouts of restructuring, purging of management, and financial instability after the turn of the century. In 2005, a switch in the wireless providers that RadioShack featured caused a huge decline in profits. This along with management problems led to several cuts in 2006. Nearly 500 stores closed down, and stock prices plummeted. The company also attempted to cut overhead expenses by laying off a fifth of its headquarters workforce.

Since 2006, RadioShack has continued to close more stores and lay off more people. At the beginning of 2015, the company faced over $1 billion in debt and filed for Chapter 11 bankruptcy in the hopes that another restructuring would save it. Late in 2015, the bankruptcy plan was approved, and RadioShack began the liquidating funds to pay off its creditors. The chain was forced to close nearly all of its remaining 4,000 stores.

In September of 2015, many problems still faced RadioShack’s Chapter 11 plan. Standard General LP and Wells Fargo claimed that RadioShack was obligated to pay the substantial legal fees accrued from lawsuits with junior creditors, estimated at around $15-20 million. This stipulation would have probably led to the collapse of all of the creditor repayment plans. Luckily, the junior creditors decided to drop the lawsuit instead.

2017 Chapter 11 Bankruptcy

As part of the restructuring plan, Standard General bought RadioShack’s brand and saved around 1,700 stores. Standard General, Wells Fargo, and other banks provided $9.4 million in cash and savings to a liquidation trust. As part of the RadioShack restructuring, the company has switched focus to pushing the Sprint brand for mobile phones.

Standard General created an affiliate company called General Wireless to operate RadioShack’s brand and assets along with Sprint. Together, Sprint and General Wireless opened co-branded stores under Sprint’s name that sold products from both brands.

In March, 2017, RadioShack was forced to close 187 more stores. This accounts for about 9% of its remaining 1,943 locations. This move affected around 1,850 of the company’s 5,900 employees. The company again filed for Chapter 11 bankruptcy, and stated plans for closing many of its locations that are shared with Sprint.

Sprint also paid $12 million as a “wind down payment” to General Wireless. In return, Sprint received the leases for 115 stores and the equipment from 245 other locations where Sprint was primarily in control.

Time will tell if Standard General and General Wireless will manage to salvage anything from RadioShack’s remains. For now, the company retains control of over 1,000 locations. If the struggles continue, this longstanding household name might go down in history as yet another company that failed to keep up with the speed of modern technological advances.

Important California Estate Planning Documents

Every estate plan is different, but there are general steps to take to ensure that you and your family are prepared for the worst. Documentation is necessary to properly manage how your finances and health care are handled after you can no longer do so yourself. It’s important to ensure that all of your wishes are fulfilled in the case of incapacity or death.

Even if you tell your family members what you want, there is no guarantee that your desires will be carried out exactly as you wish. People can forget details, let something slide, or decide against it later without your permission. Below is a list of the most important estate planning documents for residents of the state of California. It should give you an idea of the kinds of documents required to set up your own plan. It’s important to document all crucial decisions so that they can be followed precisely.

Financial Power of Attorney

A very important instruction to establish is financial power of attorney. With this document, you determine which of the people you trust the most can handle your financial situation in case you become incapacitated. Incapacitation can include unconsciousness or the inability to care for yourself, such as with dementia.

It’s a terrible experience to watch a family member become unable to handle his or her own finances. If not handled properly, such matters can cause messy legal problems. By assigning a power of attorney, a lot of the hassle is removed from this painful and stressful situation. Such a document can be put into action immediately or be set up in case of future situations. A durable power of attorney persists through any incapacitation that occurs.

Advanced Health Care Directive

An advanced health care directive helps you establish how you want to be taken care of in the event of incapacitation or death. With this document, you declare who can access your health records in case of an emergency. This trusted person would then be given the information necessary to make informed decisions about your care while still following your wishes.

The directive includes decisions such as whether or not you want your life extended if you are left in an incapacitated state. A do not resuscitate (DNR) order keeps doctors from prolonging your life if there is no real hope of recovery. The directive also includes instructions for organ donation. You can specify which, if any, parts of your body you are willing to donate.

Last Will and Testament

Probably the most well known estate planning document, an up-to-date will and testament is a crucial part of your arrangements. Your will establishes your final wishes in the event of your death. It also gives instruction as to how you want your belongings to be distributed among friends and family members. Within the will, you name an executor who will carry out the wishes for you, the testator.

A last will and testament is incredibly important for helping your family handle the many issues that come up after a death. If young children are involved, trusted people should be established as guardians. In California, a common and very effective type of document known as a “pour-over will” can be used in combination with a revocable living trust (discussed below). A pour-over will makes it easier for your property to be passed on to your beneficiaries through your trust.

Revocable Living Trust

Establishing a revocable living trust is a crucial step for California estate planning. This is especially true if you own real property (land and/or buildings). When you place your property into a trust, you are no longer considered the “owner” of that property. Instead, it is officially owned by the trust, which you control along with anyone else specifically included within the documentation as a trustee.

If you keep your trust paperwork up-to-date, it can significantly reduce the stress, hassle, and fees involved in transferring property to your beneficiaries. A probate is the process of establishing the validity of a will, and it can be a lengthy and expensive process for your heirs. A well-formed trust can bypass this problem.

We can’t plan for everything in life, so it’s best to be prepared for anything. By having a well-established plan in place, you can save your loved ones a lot of time, money, and stress when the worst happens. Before incapacitation or death occurs, make sure that the ones closest to you are legally prepared. If you want more information about the importance of such documentation, you can read about what happens if a will and testament is not in place here.

Motorcycle Accident Attorney

Riding a motorcycle is a wonderful sensation, but there are a lot of dangers associated with them. Because of a motorcycle’s size, other drivers have a harder time seeing them on the road. If a collision occurs, motorcycles provide almost no protection from injury. If you or a loved one have experienced a motorcycle accident as the result of another person’s negligence, you may be entitled to compensation for damages. By using the services of an experienced personal injury attorney such as Dan Higson, you will increase the likelihood of getting the most compensation possible.

Common Motorcycle Accident Causes

Even if you’re the safest driver in the world, accidents can happen to you. It’s impossible to control all of the factors around you, including road conditions and other drivers. Here are some of the most common causes of motorcycle accidents:

Inattentiveness. Inattentive drivers account for a large amount of motorcycle accidents each year. Inattentive drivers are often responsible for head-on collisions and left-turn collisions. They happen when a driver is not fully aware of their surroundings. With the ever-increasing presence of smart phones in drivers’ hands, this hazard has become even more commonplace.

Recklessness. Many collisions occur because of reckless driving. Examples of this include drivers going over the speed limit or driving under the influence of drugs or alcohol.

Bad communication. It’s important to be able to communicate with other drivers around you. Whether you’re riding with a group of motorcyclists or determining whether another car is taking a turn in front of you, communication, such as properly using signals, is key to surviving on the road.

Road hazards. Hazardous road conditions include loose gravel, potholes, uneven asphalt, and other issues. State and local governments maintain most roadways, but government agencies often fail to address problems on the road. Unaddressed road hazards are responsible for many motorcycle accidents.

What to Do When in a Motorcycle Accident

When a motorcycle accident occurs, it’s important to understand that the other driver and the insurance companies are not necessarily on your side. Because of this, there are several important steps to take after an accident occurs to protect your personal and legal safety. If you are seriously injured, wait for emergency personnel to arrive on the scene and worry about legal issues after your safety is ensured. If you are able to, acquire further information. Below, are some steps to keep in mind after you’ve been in a motorcycle accident:

  1. Seek medical attention. Even for minor injuries, it’s important to get official medical records that can be used to support your claim. Sometimes injuries do not become apparent until days or even weeks after an accident, so have these injuries checked out as soon as they develop.
  2. Gather information. Accurate, detailed information is crucial for your case. If safe to do so, take photographs of the crash site, the condition of your motorcycle, and your injuries. Get the contact information of the other drivers involved and any witnesses.
  3. File a police report. If possible, call the police to the site of the accident. By cooperating with the police and making a statement, you provide even more evidence for your case. Make sure to inform the police of any witnesses that might have relevant information.
  4. Hold off on repairs. Hold off on making any repairs to your motorcycle until an insurance claim is opened. If you preserve the damages done to your motorcycle throughout the examination process, it will make it easier to determine what compensation is needed. If this is not possible, keep detailed records of all repairs that are done.

California Motorcycle Laws

California has a few unique motorcycle laws that don’t necessarily exist in other states. In California, lane-splitting is legal. Lane-splitting is when motorcyclists ride between the lanes of traffic when it has slowed down. This practice is risky to the motorcyclist, so be careful whenever you attempt to do so. When lane-splitting, the motorcyclist can be ticketed if they drive recklessly. Thus, it is advisable that motorcyclists travel at a safe speed when lane-splitting so that he/she can react to sudden movements by the surrounding cars. Surrounding cars are not allowed to impede motorcycles between lanes, and they can be punished if they attempt do so.

Motorcyclists should also be aware that any negligence on their part, such as unsafe operation of your motorcycle while lane-splitting, could be used as evidence to reduce their recovery in a subsequent trial. This is because California uses the “comparative fault” system to offset an injured person’s recovery for any percentage of negligence that is attributed to their own conduct. For example, if a person suffers $50,000 in damages and is determined to be 50% at fault for their own accident, they would only be entitled to recover $25,000.

More up-to-date information can be found online at the California Department of Motor Vehicles motorcycle handbook page.

If you have been injured in a motorcycle accident caused by another person’s negligence, let Dan Higson help you get through the paperwork and insurance companies and get you the compensation you deserve. It’s possible to receive compensation for a variety of damages such as medical expenses, motorcycle repair, lost wages, therapy, disability, and pain and suffering.

Getting yourself and your motorcycle back in peak condition after an accident can be expensive. Having an experienced personal injury attorney on your side can mean the difference between fully covering your accident costs and paying everything out of pocket.

Call Ventura Attorney Daniel A. Higson at 805-644-7111

Is It Time For Bankruptcy?

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Deciding whether or not to file for bankruptcy is a stressful and complex situation that is further burdened by social stigmas. Nevertheless, bankruptcy might be the right choice for you. Many people believe that by filing for bankruptcy, they will never be accepted for loans again, but this is not true at all. Your bankruptcy stays on your credit report for 10 years, but you can get credit again within that time period, depending on your pre-filing payment history, income, debt-to-income ratio, and how well you pay off your debts after the filing.

Now that you know that filing for bankruptcy doesn’t doom your credit forever, the question remains: should you file for bankruptcy? Here are some general details to take into consideration when making your decision.

Can You Avoid Bankruptcy?

Firstly, you should sit down and take all aspects of your finances into consideration. You may find that you can alleviate your financial issues by fixing some problems or scaling back on certain purchases. Even though bankruptcy isn’t a permanent detriment to your credit, it is still a huge undertaking that shouldn’t be initiated unless you are sure it’s your best option.

What Type of Bankruptcy Should You Choose?

If you intend to go through with a bankruptcy, there are two major types that are commonly filed by individuals: Chapter 7 and Chapter 13. Chapter 7 bankruptcy can discharge most of your debt within a few months, but you may lose some of your personal property to help pay off the debt. Chapter 13 bankruptcy consists of a repayment plan based on your income, which helps you pay off your debts over the course of several years.

It’s important to know whether or not you quality for the type of bankruptcy you intend to file. If your income is too high, you may be denied from Chapter 7 bankruptcy and be expected to pay off your debt. On the other hand, if your income is too low, you might not be able to manage a repayment plan. There are many other deciding factors, so make sure to consult an experienced bankruptcy lawyer to help you determine eligibility.

Which Debts will be Forgiven?

Some types of debts cannot be wiped out no matter what type of bankruptcy you file. Some examples of non-dischargeable debts include alimony, child support, and tax debt. Most of the time student loans also can’t be discharged. If the majority of your debt will not be wiped out by bankruptcy, there is little point in filing.

What will Happen to Your Assets?

Before you file for bankruptcy, you need to take your assets into consideration to make sure that you don’t lose something that puts you into a worse situation than before. If you have a lot of equity invested in your home, you may lose it if you file for Chapter 7 bankruptcy. However, filing may alleviate the strain from your mortgage when other debts are forgiven. If your income allows for Chapter 13 bankruptcy, your mortgage will be incorporated into your repayment plan.

The fates of your other assets depend on the circumstances. Only certain items are included in exemption laws, and this depends on your location. Also, if you put an asset such as a car or boat down as collateral on a loan, the creditor may be able to take the property even if you are filing bankruptcy. Make sure that you would keep what you need to survive after the filing.

What will Happen to Your Credit Card Debt?

Bankruptcy is often an effective way to discharge your credit card debt, but not all credit cards debts can be wiped clean. Check with a bankruptcy lawyer to ensure that your credit card debt is dischargeable. Some examples of situations where credit card debt is a problem during a bankruptcy filing are if you lied on your application or used the cards to an extreme extent.

What will Happen to Your Pension and Insurance Plans?

Most pension and life insurance plans are protected from bankruptcy proceedings. However, you should check before you file to make sure that this is the case for any plans you have, including 401k, IRA, or life insurance policies.

What Happens to Co-Signers?

You need to make sure that co-signers on your loans will not be left with your debt after bankruptcy wipes it clean from your record. If you go through a bankruptcy filing with co-signed loans, the people close to you who helped you get your loan may be stuck with the entirety of the remaining payments. In general, Chapter 13 bankruptcy protects co-signers, but Chapter 7 bankruptcy does not.

How will Bankruptcy Affect You?

Fear of social stigmas shouldn’t stop you from considering bankruptcy, but you should be warned that the process involved in filing for bankruptcy is invasive and demanding. You display your entire financial life to the court. If you file Chapter 7, you may lose some of your personal property. If you file for Chapter 13, your spending habits will be scrutinized for several years.

Taking the positive and negative factors into account, if you are still considering bankruptcy, it’s crucial to consult an experienced and certified bankruptcy specialist. Dan Higson, with Hathaway Perrett Webster Powers Chrisman & Gutierrez A Professional Corporation, is such a resource in the Ventura and Oxnard counties of California. He can help guide you along every step of the bankruptcy process, including your decision on whether or not to file in the first place. Call him today! (805) 644-7111

RadioShack’s Rollercoaster History of Boom and Bankruptcy

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RadioShack is an American chain of electronics stores that has experienced both highs and lows through its long history. It was founded in 1921 by brothers Theodore and Milton Deutschmann to sell ham radio equipment. The company originally consisted of a single location for retail and mail order sales. RadioShack issued its first catalogue in 1939, and even extended into the high fidelity music market by producing its own private label products with the brand name Realist. Throughout its history, the company constantly attempted to rebrand itself, changing its name, slogan, management, and purpose time after time.

By the 1960s, RadioShack had expanded its mail order business, and included 9 stores. However, at this time the company fell on hard times and had to file for bankruptcy. Luckily for RadioShack, entrepreneur Charles Tandy took an interest and bought the company for $300,000 in 1962. Tandy Corporation was interested in expanding their leather goods company into other hobby businesses. In order to make RadioShack viable again, Tandy ended the mail-order business and credit sales and dropped most of the upper management positions. Tandy led the ailing company through a period of growth and success in the ‘60s and ‘70s before his death.

In the ‘80s, RadioShack attempted to edge into the IMB PC compatible market. This didn’t last long, however, as the company struggled against rivals like Dell. In 1982, people were moving towards owning their own phones instead of renting them after the breakup of the Bell System, and RadioShack jumped on board by offering 20 models of home phone.

In the ‘90s, RadioShack once again attempted to change, this time having to restructure over 200 store locations. The company wanted to shift away from components and cables towards more mainstream consumer electronics, which it continued to do into 2015 by selling things like cell phones. In 1994, the company began to offer inexpensive, non-warranty repairs for over 45 brands of electronics. In 1998, RadioShack claimed to be the largest seller of consumer telecommunications products in the world. By 2011, smartphone sales accounted for over half of the company’s revenue.

Unfortunately, management issues, a stream of bad CEOs, and tough competition led to several bouts of restructuring, purging of management, and financial instability after the turn of the century. In 2005, a switch in the wireless providers that RadioShack featured caused a huge decline in profits. This along with management problems led to several cuts in 2006. Nearly 500 stores were closed, and the stock prices plummeted. The company also attempted to cut overhead expenses by laying off a fifth of its headquarters workforce.

Since 2006, RadioShack continued to close more stores and lay off more people. At the beginning of 2015, the company faced over $1 billion in debt and filed for Chapter 11 bankruptcy in the hopes that another restructuring would save it. Late in 2015, the bankruptcy plan was approved, and RadioShack began the liquidating funds to pay off its creditors. The chain was forced to shutter or close nearly all of its remaining 4,000 stores.

In September of 2015, many problems still faced RadioShack’s Chapter 11 plan. Standard General LP and Wells Fargo claimed that RadioShack was obligated to pay the substantial legal fees accrued from lawsuits with junior creditors, estimated at around $15-20 million. This stipulation would have probably led to the collapse of all of the creditor repayment plans. Luckily, the junior creditors decided to drop the lawsuit instead.

As part of the restructuring plan, Standard General bought RadioShack’s brand and saved around 1,700 stores. Standard General, Wells Fargo, and other banks will provide $9.4 million in cash and savings to a liquidation trust, and Standard General will give up its rights to $30 million in unsecured bonds.

Time will tell if Standard General will manage to salvage anything from RadioShack’s remains. If not, this longstanding household name will go down in history as yet another company that failed to keep up with the speed of modern technological advances.

Collectibles, Art, Antiques, and Capital Gains Tax

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Almost every asset that can be sold will also be taxed, including valuables such as antiques, fine art, and collectibles. In fact, the rate of federal taxation on collectibles is one of the highest for investment property. When you plan your estate, it is important to take this taxation into account.

You should not leave it to your heirs to decide what happens to your cherished collections. They might not have the same appreciation for these items that you do, or they might end up fighting over particular pieces and cause unnecessary conflict.

You have several options when thinking about what to do with your collections, but you need to know how you regard the collection before making any decisions. If you view the collection as an investment, then you should maximize your profit by timing the sale. It might be best to sell immediately or wait several years. If you only want to maximize the profit to add it to the value of the estate, it might make the most sense to simply pass it on in your will.

If you value your collection for its artistic value, this is another important factor to take into consideration. Maybe a particular family member would appreciate the collection more than any of the others, even if that member is not as closely related to you. Maybe the collection should be sold to an unrelated buyer that will ensure that its artistic value will be appreciated for generations to come.

No matter how you decide to pass on or sell your collections, you must take into consideration both state and federal taxes such as capital gains tax on collectibles, gift tax, and estate tax. These will be slightly different depending on your location.

Estate Tax

40 percent is the current top federal estate tax rate, and the federal estate exemption is $5.43 million. What this means is that you can pass up to 5.43 million dollars to your heirs without incurring federal estate liability.

Gift Tax

As of 2015, you are able to gift up to $14,000 per year to someone without incurring any gift tax liability. This has a lifetime maximum of the estate tax limit of $5.43 million, above which any further gifts will be taxable. If you gift away more than $14,000 in a year, it is included against your estate tax exemptions.

Capital Gains Tax

Collectibles include a wide range of items, such as stamps, coins, precious metals and stones, fine wines, glassware, or even such trinkets as political campaign buttons. Most antiques are also considered collectibles. The high capital gains tax rate results partly from the argument that such collectibles lack broader benefits, such as innovation or higher productivity. On the other hand, there is a strong argument that the preservation of such items benefit society in other ways.

The capital gains tax for the sale of collectibles is generally set at 28% in most areas of the United States. In California however, capital gains are considered ordinary income and taxed at the regular individual tax rate. Thus, no adjustments are necessary on the California tax return for capital gains income.

Double Taxation

It is important to realize that some situations can cause double taxation. For example, if you sell a collection and then pass the money on in your estate, it may be double taxed (depending on the amount). Similarly, if you sell a collection and then gift a large sum of the resulting money to someone, it may be taxed twice.

Planning Your Estate

Here are a few factors to keep in mind while planning your estate when it comes to art and collectibles:

  • Decide how you feel about the collection and how you want to deal with it. Is it simply a financial investment, or is there an emotional investment as well?
  • When passing on certain items, further documentation may be required. Items of significant historical and military value may be subject to various state and federal laws.
  • Get appraisals for all of your works of art. Understand that the value of particular pieces can change over time, so an appraisal done 50 years ago probably means little now.

If you have further questions concerning how to deal with your collections or estate planning in general, having an experienced and trusted estate-planning attorney is a crucial asset. Daniel Higson can give you the legal counsel you need to help you through every step of planning your estate. Call today! 805-644-7111