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Attorney C. Stephen Gurdin Jr.

Providing quality legal services to individuals, corporations and law firms since 1971.


Pennsylvania Bankruptcy Law
Pennsylvania Bankruptcy Law

Many people harbor bad feelings about bankruptcy, that it makes them a failure. This is not true! Call Today for a FREE Bankruptcy Evaluation, 800.221.0618.

Estate Planning Law
Estate Planning Law

Estate Planning or Probate Planning is something that every responsible adult should do. Call Today for a FREE Estate Planning Evaluation, 800.221.0618.

Business Law
Business Law

If you are facing business decisions, the legal support you retain can impact the future of your business and your bottom line, Call Today, 800.221.0618.

Estate Tax

ESTATE TAX
Husband and wife estate tax, continued

Terminal interests: A terminal interest is one that terminates upon the lapse of time or the happening or failure to happen of some event or contingency, if any remaining property passes to a person other than the surviving spouse. If the surviving spouse receives a terminable interest in property; the marital deduction is lost as to that property. The most common terminable interest is an income trust which may qualify for the marital deduction if it qualifies under special rules. The device is frequently used along with a credit shelter trust, which passes property outside of the estate to the children. Since the property in this trust never passes to the surviving spouse, it is not part of his or her estate and passes directly to the children tax free so long as it is within the exemption in the decedent’s estate tax.

Estate Tax

Qualified terminal interests: If the surviving spouse receives a trust allowing income (without limitation) for life and only the power to invade corpus for his or her benefit (the ability to invade for a child or anyone else defeats the qualification), and the decedent irrevocably elects this treatment on the estate tax return, the interest which the surviving receives, although it is a terminal interest never the less qualifies for the marital deduction and passes free of estate tax. Such an interest is called a Qualified Terminal Interest Property (QTIP).

Funding the QTIP: The Qualified Terminable Interest can be a trust, or an annuity such as a joint survivor annuity, or an IRA (but care should be taken to allow the payment in equal installments rather than in a lump sum which would trigger income tax to the trust). If an IRA is used to fund the QTIP, the payments to the survivor may be limited to the minimum annual distributions or may be directly to the surviving spouse outside of any trust. The surviving spouse then rolls the payment into an IRA free of income tax until age 70 1/2 .

Alien spouse: The marital deduction is allowed only if the surviving spouse is an American citizen or becomes one before the estate tax return is due (within 9 months from the date of death plus an additional 6 months on extension) and was a U.S. resident from the date of the decedent’s death, or unless the decedent leaves the bequest to the surviving spouse through a qualified domestic trust (QDOT). If a trust to the surviving spouse would otherwise qualify for the marital deduction it may be reformed to meet the special requirements for the QDOT. The QDOT or reformed spousal trust may be created by the decedent, the executor or the surviving spouse. The QDOT election must be irrevocably elected on the estate tax return. The surviving spouses assignment to a QDOT must be made before the estate tax filing date, and the transfer must be completed before the estate is closed.

To make sure that you are protected, it is crucial that you contact skilled and experienced Attorney C. Stephen Gurdin Jr. a Pennsylvania Estate Planning lawyer.
Call Attorney C. Stephen Gurdin Jr. at his Gurdin Law Wilkes-Barre-Scranton Pennsylvania area office today, 570.826.0481 toll free 1.800.221.0618.email Stephen@gurdinlaw.com to schedule a free consultation.

Regular Office hours for estate tax planning are 2:30 to 7 p.m. Monday through Friday by appointment. Earlier appointments available upon request.

The 341 meeting

legal representation ...

The 341 meeting

The debtor must appear and submit to oral examination, under oath, at a meeting of creditors convened (called brought together and conducted) under section 341 of the Bankruptcy Code. The meeting is convened (called and brought together and conducted) by a trustee appointed by the Office of the United States Trustee, a division of the United States Department of Justice. The purpose of this meeting is to enable the Trustee and creditors to discover and preserve assets. Any creditor may appear and examine the debtor. The debtor is required to attend. This obligation to attend is not satisfied by the appearance of counsel for the debtor. Under certain circumstances the debtor may be permitted to appear by phone for good cause shown such as illness, disability out of state residence, active service in the United States Armed Forces. The case may be dismissed if the debtor fails to appear or if the debtor exercises a Fifth Amendment right against self-incrimination (See further provisions dealing with self-incrimination below).The Court is forbidden to preside or attend the meeting. The Debtor and all creditors will receive 21 days written notice of the meeting. The meeting may be adjourned and reconvened in certain circumstances and the debtor will be required to attend additional meetings, although this seldom happens except in larger complex cases.

The Notice of the 341 meeting contains information about:
The chapter under which the debtor has filed for relief;
The date of the filing;
The debtors name and address and any other names used by the debtor in the last 8 years;
The last 4 digits of the debtors Social Security number;
The name, address and telephone number of the Trustee assigned to hear and administer the case;
The date, time, and place of the first meeting of creditors under section 341 of the Bankruptcy Code;
Whether or not there is a presumption of abuse;
Deadlines for objections to discharge of certain debts or to the discharge as to all debts, as well as to object to exemptions;
A short description of actions that creditors may not take (the effect of the automatic stay);
Whether creditors should file a claim and if so the bar dates for the filing of such claims;
The address of the Bankruptcy Clerk’s office

Self-Incrimination and immunity
Anyone who is required to submit to an examination to testify or to provide information in a bankruptcy case may be granted immunity. If immunity is granted the person may be compelled to testify. For example, suppose that either the debtor or a witness has been asked to testify as to a large and valuable asset that has not been disclosed in the bankruptcy papers as filed. The debtor or witness may wish to assert their fifth amendment right against self-incrimination. The trustee then has a choice. The trustee can file for dismissal and the Court will dismiss the case. The trustee may decide that it is in the public interest to obtain immunity from prosecution for the debtor or witness having knowledge of this asset. If immunity is granted, the debtor or witness can then be compelled to testify.
Four steps must be completed to obtain immunity:
a. The person must refuse to testify;
b. The trustee or other party in interest must enlist the aid of the U.S. Attorney;
c. The U.S. Attorney must be satisfied that the testimony of the person is in the public interest;
d. The U.S. Attorney must apply to the District Court for an order.

Income in respect of discharge of indebtedness
The discharge of debts in bankruptcy does not result in imputed income taxable to the debtor.

If a creditor or its representative (such as a collection agency or collection attorney) supplies the debtor with 2 communications within 90 days prior to the bankruptcy filing, provides the debtor’s account number, and the address to which correspondence should be sent, such creditor or representative is entitled to notice. For this reason it is important that the debtor provide to their bankruptcy attorney with copies of all communications received from creditors or their representatives within 90 days prior to their bankruptcy filing.

with the help of an experience bankruptcy lawyer, many debtors can keep their property and discharge their debts. This gives them a fresh start.
Call bankruptcy lawyer C. Stephen Gurdin Jr. at his Wilkes-Barre-Scranton office today at 570.826.0481, toll free at 800-221-0618, fax 570-822-7780, email Stephen@gurdinlaw.com to schedule a free consultation.
Regular Office hours 2:30 and 7 p.m. Monday through Friday by appointment. Earlier appointments available upon request.

Estate Tax: husband and wife

ESTATE TAX

Husband and wife: For a husband and wife, there is an unlimited marital deduction available that will allow property of the first spouse to die to pass to the surviving spouse without the payment of estate tax, thus preserving the property to support the survivor. To the extent that the assets are not consumed, they may be taxable in the survivor’s estate. The surviving spouse may take advantage of any estate tax deduction unused in the estate of the first spouse to die.

Marital deduction. If a bequest to a spouse is a dollar value either as specified or ascertainable by formula, the estate may have a taxable gain or loss if the bequest is satisfied in appreciated or depreciated property. This can be avoided by phrasing the bequest in terms of a share of the estate. A marital deduction is permitted between domestic partners following the holding that a provision relating to “his” in the Defense of Marriage Act has been held to be unconstitutional. The issues of domestic partners are currently being litigated in various courts.

Computation of the marital deduction. The valuation of property passing to a surviving spouse is based on fair market value as of the valuation date. Adjustments must be made for administrative expenses. These expenses fall into 2 classes, transmission expenses, the appropriate share of which reduces the marital deduction, and management expenses, which do not reduce the marital deduction unless they are allocable to other property. Transmission expenses include: all expenses arising by reason of the decedent’s death, such as fiduciary commissions, legal fees, appraisal fees, will construction and contest costs. Management expenses include: interest expense, brokerage commissions, and investment advisory fees. A mandatory direction in the will that expenses and taxes be paid out of the nonmarital share or a provision granting the executor discretion to do so preserves the full deduction. If there is no such provision, the residual estate bears the estate tax without apportionment among specific legatees.

Property passing to spouse. If property is included in the decedent’s estate, it does not matter how the surviving spouse acquires it. It could be acquired by gift, bequest, intestacy, survivorship, operation of law, antenuptial agreement, compromise of will contest, election of statutory share (the share to which a surviving spouse is permitted and which such spouse is entitled to take, even if the will provides less.), or written disclaimer by another within 9 months of the death which results in property passing to the surviving spouse. Property held by the decedent and the surviving spouse by the entireties is included at ½ of its value, but if it passes outside of the estate through a trust, it must be converted to ownership by the surviving spouse so that it passes as probate property in order to qualify for the marital deduction. The deduction is limited to the value of probate assets actually passing to the surviving spouse. In the case of simultaneous death, the decedent’s spouse is considered as surviving if the will or local law so provides. A clause in the will that the spouse is considered as predeceasing controls as to bequests except as to joint property. Under the Uniform Simultaneous Death Act each joint tenant is treated as having survived as to his or her own interest.

To make sure that you are protected, it is crucial that you contact skilled and experienced Attorney C. Stephen Gurdin Jr. a Pennsylvania Estate Planning lawyer.
Call Attorney C. Stephen Gurdin Jr. at his Gurdin Law Wilkes-Barre-Scranton Pennsylvania area office today, 570.826.0481 toll free 1.800.221.0618.email Stephen@gurdinlaw.com to schedule a free consultation.

Regular Office hours 2:30 and 7 p.m. Monday through Friday by appointment. Earlier appointments available upon request.

Avoiding liens

Avoiding liens

A debtor may avoid a lien that impairs an exemption to which the debtor is entitled, if the lien is created by a judicial proceeding such as a law suit or if the lien arises in connection with a loan other than a loan to purchase the property to which the lien attaches. For example, a loan for cash to help with household expenses secured by household furnishings or appliances, or secured by a vehicle which the debtor already owns. The provisions allowing such avoidance do not apply to liens arising by reason of domestic support obligations or in connection with a separation agreement, property settlement, divorce or certain other related matters. There are also limitations on the power of a federal court to upset a final judgment of a state court. Consult your bankruptcy attorney as to these matters.

WAIVING A RIGHT TO AVOID LIENS. Any waiver of a right to avoid a lien that is provided by the Bankruptcy Code is unenforceable in a bankruptcy proceeding.

with the help of an experience bankruptcy lawyer, many debtors can keep their property and discharge their debts. This gives them a fresh start.
Call bankruptcy lawyer C. Stephen Gurdin Jr. at his Wilkes-Barre-Scranton office today at 570.826.0481, toll free at 800-221-0618, fax 570-822-7780, email Stephen@gurdinlaw.com to schedule a free consultation.
Regular Office hours 2:30 and 7 p.m. Monday through Friday by appointment. Earlier appointments available upon request.

Phantom Stock: benefiting a hard working employee

Phantom Stock: benefiting a hard working employee
• Many small business owners wish to provide an incentive to a particularly hard working employee or several employees but prefer to keep actuall ownership of their business in the family. Formal employee stock option plans or 401(k) plans may be too expensive and involve complex rules. Phantom stock can supply a way of accomplishing this. The employer promises the employee a bonus based on some percentage of increase in the value of the company payable at a predetermined time. The calculation can be as simple as the value of a fixed number of shares or the equity value of the company multiplied by some other factor which can be easily verified. If properly drawn, such a plan does not trigger the complex rules required for formal employee stock option plans or 401(k) plans and does not involve a transfer of ownership. Such a plan can be combined with other incentive plans to provide even greater incentive, such as a note evidencing a loan by the employee to the company, which can be converted into shares. The shares may be either voting or non-voting. The right to convert may be triggered by a specific event, or the passage of time. Setting up such plans can be affordable and yet provide substantial incentive to an employee, or several employees, to take a substantial interest in the success of the company.

Best practices suggest that a close working relationship with qualified and experienced legal counsel will enable you to maximize your success and minimize the potential pitfalls which so often plague small business. Good employees are one of your most valuable assets. Keeping good employees is vital to the success of any business.
Call business lawyer C. Stephen Gurdin Jr. at his Wilkes-Barre office today at 570.826.0481, toll free at 800-221-0618, fax 570-822-7780, email Stephen@gurdinlaw.com to schedule a free consultation.
Regular Office hours 2:30 and 7 p.m. Monday through Friday by appointment. Earlier appointments available upon request.