10 Down … Many, Many More to Go!

Sivia Law

Todd Sivia Managing Partner, Sivia Business & Legal Services


It’s official. This month marks the 10th anniversary of Sivia Business & Legal Services! It’s hard to wrap my head around, honestly. We’ve come a long way–from a lone lawyer space to a four-attorney firm. I was once an army of one, but now we have our own office building(s) and a full time support staff. I am beyond grateful to all the wonderful clients. It’s been an honor that you’ve allowed us to work with you and advocate for you. I thank my colleagues who have used us as a resource and referred business to us. We continue to learn, grow and hone our skills thanks to you. Last but not least, all the staff members that have been with us throughout the years. You hold it all together and keep the practice running smoothly. We wouldn’t have made it to this point without everyone’s trust and support. It’s been an exciting journey and I look forward to the future. Cheers to many, many more successful years. Thank you.


A “Trust”ed Twist on Buy/Sell Agreements

Sivia Law

Todd Sivia Managing Partner, Sivia Business & Legal Services

A Cross Purchase buy/sell agreement is a popular strategy used in succession planning. In a typical cross purchase agreement, each owner purchases a life insurance policy for each of the other owners. So, for example, in a business with three partners, six life insurance policies are purchased. Naturally, the more owners involved, the more complicated and expensive this type of agreement can be.

But there is another option—a twist on the typical buy/sell. It’s called a Trusted Cross Purchase agreement. In a Trusted Cross Purchase agreement, only one insurance policy is purchased per person and the policies are then held by a trust, until such time as the policies are paid out.

There are other advantages, too, aside from purchasing fewer policies. The insurance company takes on the risk of early death or disability—thereby initiating an early buy out. This type of agreement also ensures there will be the necessary funds to purchase the business, and the policies typically benefit from the tax-free “inside build-up” of the monies invested in the policies.

Of course, disadvantages do exist. Using current funds to purchase the life insurance polices take away from capital that could be used to grow the business now. Plus, should one of the partners decide to terminate employment for any reason beside death, the life insurance policies are only worth the cash surrender value.

In reality, there is no one-size-fits all buy/sell agreement. Each business situation is different, and an experienced attorney should evaluate each business by its unique circumstances. If you would like to learn more about a Trusted Cross Purchase agreement, or any other buy/sell agreement, contact me at 618-659-4499 or info@sivialaw.com.

New Year + New Laws = Outdated Estate Plan

Sivia Law

Todd Sivia, Managing Partner, Sivia Business & Legal Services

As 2016 begins, we reflect upon the joys and challenges we faced throughout the past year. Unfortunately, many people overlook how these joys and challenges affect estate planning. Often, the events that shape our lives the most also influence how we would want to take care of our loved ones. For example, have you experienced changes such as these in 2015:

  • Birth or adoption of a child or grandchild
  • Child turned 18
  • Divorce or marriage
  • Change in named guardians, beneficiaries, trustees or personal executors
  • Approaching age 70
  • State-to-state move
  • Own your own business

Of course, even if you haven’t had any major changes take place in your life, it is still a good idea to have your estate plan reviewed every three years. Laws change periodically so it is important to find out if any legislative revisions impact your estate plan. After all, an out-of-date can add to the stress and pain affecting loved ones during a difficult time.

It is important to us that our clients are always prepared for the unexpected. If you wish to set up a review of your current estate plan or establish a new one, our firm is offering you a free estate planning consultation now through January 31, 2016. You can reach our office at 618-659-4499 or email us at info@sivialaw.com. In the meantime, check  our free Estate Planning Resources Page here.

We hope you transition into 2016 knowing you have safeguarded your loved ones from unintentional consequences through intentional planning.

Happy New Year!




Understanding Veteran’s Benefits & Eligibility

Sivia Law

Todd Sivia
Managing Partner, Sivia Business & Legal Services

In honor of Veteran’s Day, I wanted to talk about benefits available to Veterans and their spouses. The federal government offers a variety of benefits to Vets and their families, but many Vets are unsure how to access such benefits or aware of the eligibility requirements.

There are several benefits available, including education and training, compensation, home loans, rehabilitation, life insurance and pension offerings for Veterans and their dependents. Each benefit has its own eligibility requirements.

A Veterans Pension is a tax-free benefit paid to low-income, wartime Vets. Similarly, a Survivors Pension is a tax-free monetary benefit payable to a low-income, un-remarried surviving spouse and/or unmarried child(ren) of a deceased Veteran with wartime service.

To qualify, a Vet or a surviving spouse must be housebound or require the aid and attendance of another person. Pension benefits are needs based and your “countable” family income must fall below the yearly limit set by law.

Veterans must have at least 90 days of active duty, including one day during a wartime period, to qualify for a VA pension. The 90 days does not have to be continuous. At least 90 days of active duty service during WWI, WWII, Korean War, or the Vietnam War (09/16/40 to 07/25/47, 06/27/50 to 01/31/55, and 08/05/64 to 05/07/75). If you served less than 90 days, you may be eligible if discharged for a service-connected disability.

If the active duty occurred after 9/7/1980, you must have served at least 24 months or the full period that you were called up (with some exceptions).

Eligible Veterans must also be:

  • Age 65 or older with limited or no income, OR
  • Totally and permanently disabled, OR
  • A patient in a nursing home receiving skilled nursing care, OR
  • Receiving Social Security Disability Insurance, OR
  • Receiving Supplemental Security Income

A Survivors Pension is calculated to be an amount equal to the difference between your countable family income and the annual pension limit set by Congress. For spouses or unmarried children to qualify for the Survivors Pension benefit, the deceased Veteran must have met the following service requirements:

  • Veterans must have at least 90 days of active duty, including one day during a wartime period, to qualify for a VA pension. The 90 days does not have to be continuous. At least 90 days of active duty service during WWI, WWII, Korean War, or the Vietnam War (09/16/40 to 07/25/47, 06/27/50 to 01/31/55, and 08/05/64 to 05/07/75).
  • If the active duty occurred after 9/7/1980, you must have served at least 24 months or the full period that you were called up (with some exceptions).
  • Was discharged from service under other than dishonorable conditions.

Discerning eligibility and the completing the application can be a daunting, complicated process. If you, or someone you love, may qualify for VA or survivor benefits, contact me at 618-659-4499 or email me at info@sivialaw.com. You can also visit our website at www.sivialaw.com for more information on our Veteran’s Benefits assistance. I would be honored to assist a Veteran receive the benefits he/she deserves for protecting our freedom.

What is Probate?

Sivia Law

Todd Sivia
Managing Partner, Sivia Business & Legal Services

Probate process is often misunderstood. Probate is basically the process of administering the will of a deceased person. The process includes resolving any claims, paying remaining debts and the distribution of property.

It can also be costly and time consuming—and completely avoidable.

  1. What Is Probate?

Probate is a court process required when you are unable to manage your affairs. It involves a lot of paperwork and court appearances (i.e. lawyer fees). All of these costs are paid from the estate—monies that would otherwise go to the beneficiaries.

Probate is also a public process. Therefore, all of your assets, as well as their estimated value, become a part of the public record.

  1. Can I Avoid Probate If I Have a Will?

No. A will is merely a guide map directing assets through probate process.

  1. How Can I Avoid Probate?

The only way to avoid probate is to ensure all of your assets, upon your death, will automatically pass into an alternative to a will. A living trust, for example, holds title to all assets or the assets automatically pour into the trust upon death, thereby circumventing the probate process.

In the case of disability, you may eschew probate by legally authorizing a proxy with regards to property and/or health decisions. Examples of legal means to avoid probate in the face of a disability include financial power of attorney, healthcare power of attorney, and coordinated living trust.

  1. Is Probate Expensive?

Absolutely. Probate can be a complicated process so most people hire and attorney—which can cost $2,000-$5,000 for a simple estate. For estates exceeding $100,000, the costs can be between $5,000-$10,000. Why? The executor must be paid. The probate case has to be filed with the state and the filing fee is typically around $300. Probate cases must be published in the local newspaper, so publishing costs are also incurred by the beneficiaries.

And since the details of the estate do become public, there is also an increased likelihood that someone will come forward to contest the will. Should that occur, the attorney’s time and your expenses would also increase.

The good news is that probate is avoidable with proper planning. Yes, a good estate plan will cost money. But it pays for itself several times over in the long run. If you have questions regarding the probate process or estate planning, you can contact me at 618-659-4499 or by email at info@sivialaw.com. You can also learn more about our estate administration and probate services online at www.sivialaw.com/estateplanning.html.

Don’t Make an ‘Uber’ Mistake: Understand the Difference Between Employee & Independent Contractor

Sivia Law

Todd Sivia
Managing Partner, Sivia Business & Legal Services

Ride-share giant Uber is currently facing a labor law suit by former freelance workers, claiming they were “employees” and not, as Uber categorized them, “independent contractors.”

This is a distinction that often vexes business owners. There are significant tax benefits to employers that hire independent contractors instead of traditional employees. However, claiming your workforce consists of independent contractors when they are, in fact, employees can cause headaches with the IRS.

But what are the differences between an employee and an independent contractor?

According to the IRS, anyone who performs services for an organization is an employee if the organization can control what will be done and how it will be done. Specifically, if an organization decides 1) a defined wage or salary, 2) an implied or written contract and 3) maintains control of the person’s work by the employer, then the worker is an employee. This applies even if the individual is given “freedom of action.”

By contrast, a worker is an independent contractor “if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done.” Independent contractors do NOT have the legal right to control the details of how the services are performed.

There is often a fine line between the two, but the wrong choice can cost your business thousands of dollars in taxes and legal fees. If you are unsure where your staff falls, contact me at 618-659-4499 or info@sivialaw.com.

As for Uber, it will be interesting to see what the federal court will decide. Think about this: the Uber Driver Terms & Conditions states, “You will not, in your use of the Services, cause nuisance, annoyance, inconvenience, or property damage, whether to the Third Party Provider or any other party.” Given the definitions mentioned above, who do you think is right?

Is Deeding Property Protection Against Estate Tax?

Sivia Law

Todd Sivia
Managing Partner, Sivia Business & Legal Services

Estate Planning is a topic no one wants to think about. But, unfortunately, estate planning requires a lot of thinking and careful preparation. Often, a seemingly harmless act has catastrophic, rippling effects on other family members. For example, aging parents are looking for ways to protect their children’s inheritance from probate or estate taxes. Unfortunately, all to often parents are deeding their homes to their children, thinking it is a less expensive and easy way to transfer ownership. However, there are several reasons to avoid this alternative.

First, let me define what it means to “deed your residence.” Simply put, it means transferring the title to your children’s name without a formal sale. If the parents are ready to down size to an assisted living facility or prefer to remain in the home but are concerned about future estate taxes, deeding property appears ideal.

But, if the transfer is completed within five years before the parents require nursing home care or government benefits, it can cause a delay in Medicaid eligibility.

Additionally, if the property is in Illinois, there are property tax exemptions for owner-occupied property and senior-occupied property. So unless the children are moving in with the parents, or the children are over 65, the property tax bill will go up.

And what happens if the property is deeded to an adult child, and that child subsequently gets divorced? The ex-spouse is entitled to half of the property. If the parents’ intention was to stay in the home, this divorce could significantly alter those plans.

Finally, if aging individuals sells their property, its exempt from capital gains tax. However, if the property is deeded to the children and they sell it, the children may be looking a substantial capital gains tax liability.

No, estate planning isn’t fun. It can be stressful. But, mostly, estate planning needs to be strategic.

If you have questions regarding a contract for deed, or any other estate planning options, you can contact me at 618-659-4499 or e-mail me at info@sivialaw.com. You can also visit our website and learn more about our estate planning strategies at www.sivialaw.com/estateplanning.