Passing Down the Summer Cottage

A family’s summer cottage is a place for relaxation—a break from the stresses of work, city life, and winter’s grueling months. But this refuge can quickly turn into a source of stress itself when its owners try to pass the property along to their children. What was once a place of family union can turn into divisions between siblings, arguments over money, and a storm of emotions.

A number of baby boomers who grew up spending summers at the family cottage now face the responsibility of inheriting the property from their ageing parents. And the burden of making the transaction as smooth as possible often falls on the parents themselves. A recent article in the Wall Street Journal addresses the issue by presenting a number of possible solutions to make the transfer of property as easy as possible.

  1. Establish early on how the property is being funded in the long term.
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Minnesota’s New Gift Tax: What You Need to Know

Minnesota may hold a steady place near the top of Gallup’s annual Best Places to Live, but a recent Wall Street Journal article claimed the state is also edging out the competition on another list: Worst Places to Die.

Minnesota’s place on the list, which also recommends against passing away in Washington and Nebraska, was established by its high 16% estate tax (or “death tax”). But the state’s number shot up recently after the state passed an additional 10% gift tax—a fee for transferring property to another person during your lifetime.

Here’s the breakdown: 10% of gifts in excess of $14,000 are counted toward your lifetime credit of $100,000 (which comes to an exemption of about $1 million in gifts total). While legislators are quick to assure panicked residents that the majority of people in the state won’t ever see the tax, for many small-business or multiple-property owners, the … Read More

How Much Are You Worth?

Building a business from the ground up is an exhilarating endeavor that comes with a number of decisions: the name of the company, whom you should hire, where you’re headquartered. But there is one question that many entrepreneurs don’t consider until things are already in motion:  what are you worth?  How much should you really pay yourself for owning and running the place?

Unfortunately, there’s not a magic answer. There are actually a number of approaches business owners take in determining their salary—it all depends on several factors, including the size of the business, the owners’ determination to re-invest in the company, and the amount of debt owed.

Many financial experts, including the U.S. Small Business Administration (SBA), recommend following one of the following approaches:

  1. Pay yourself what others in the field earn. This means doing a little research (the SBA’s income statistics page is a good place to start)
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