Law Offices of

Michael Cherewka

 624 North Front Street, Wormleysburg, PA 17043

Phone:  717 – 232 – 4701                               Fax:  717 – 232 – 4774



Copyright 2012




             THE LAW OFFICES OF MICHAEL CHEREWKA is proud to offer this “Starting a New Business” kit to you, as you consider or begin a new business.  As a local business ourselves, we can appreciate the hard work and dedication necessary to start and maintain a successful business.  This is our attempt to assist you with some of the decisions you will be facing.

             This kit includes a variety of information as well as a few sample start-up forms enclosed as examples.  Please contact us for further assistance.  Good Luck as you begin your new business!

 This kit is for informational purposes only.  You should always seek the advice of an attorney and an accountant as you start and operate a new business.





 1.         CHOICE OF ENTITY

  • C Corporation
  • S Corporation
  • Partnership
  • Limited Partnership
  • Limited Liability Company


 3.         PAYROLL TAXES

4.         INSURANCE


  • Financing Checklist
  • Sources of Financial Assistance



  • Initial Registration
  • Mercantile Tax
  • Business Privilege Tax
  • Occupational Privilege Tax
  • Sales Tax
  • Licenses & Permits


  • Family Wealth Preservation
  • Estate Planning Checklist









C Corporation

S Corporation

Tax Rate graduated rates up to 35% apply to taxable income no tax to the S Corp except in two limited circumstances (recognized built-in gains and excess passive net income
Number of Owners no restrictions no more than 100 shareholders
Type of Ownership Interests stock; there may be different classes of stock stock; only common stock class; may, however, be voting and nonvoting
Special Allocations not permitted; dividends paid based on stock ownership not permitted; income, gain and loss pass through to shareholders based on stock ownership
Liability of Owners generally limited to assets in the corporation generally limited to assets in the corporation.
Transferability of Ownership Interests unlimited freely transferred only to eligible S corporation shareholders
Duration indefinite indefinite
Management directors / officers directors / officers
Liabilities & Basis liabilities incurred do not  increase shareholder’s basis liabilities incurred do not increase shareholder’s basis
Pass-through of Losses may not be passed through to and deducted by shareholders may be passed through to and deducted by shareholders, subject to restrictions
Fringe Benefits shareholders and employees are eligible for most fringe benefits 2% shareholders are not eligible for certain fringe benefits
Fiscal Year may use any fiscal year must use the calendar year, subject to certain exceptions
Tax upon Sale or Distribution of Appreciated Assets. potential double taxation – corporate level tax upon sale or distribution & dividend or capital gains tax upon distribution of sale proceeds single tax at the shareholder level upon sale; gains tax at the corporate level is possible under certain circumstances.
Tax to Entity upon Liquidation taxed on assets none except for potential built-in gains tax
Tax to Owners upon Liquidation gain recognized to the extent that Fair Market Value of property distributed exceeds the shareholder’s stock basis gain recognized to the extent that the property distributed exceeds the shareholder’s stock basis.





Other Entities




Tax Rate no tax to the LLC on LLC income; all income, gain, and loss pass through and are taxed to the members no tax to partnership on income; all income, gain, and loss pass through and are taxed to the partners
Eligible Owners

no restrictions

no restrictions

Type of Ownership Interests membership interests general and limited partnership units; may be different classes of ownership interests

Special Allocations permitted if they have substantial economic effect permitted if they have substantial economic effect

Liability of Owners limitedgeneral partnership, unlimited; limited partnership, general partner unlimited, limited partner limited to investment in partnership

Transfer-ability of Ownership Interests restrictions may exist under state law transferable in accordance with terms of partnership agreement; ordinarily not without consent of the other partners

Duration dissolves at the time specified in agreement or upon loss of member unless other members agree to continue LLC terminates when there is more than a 50% change in partnership interests during any 12 month period

Management all members or designated managers general partners

Liabilities & Basis liabilities incurred increase a member’s basis in his membership interest liabilities incurred by the partnership increase a partner’s basis in the partnership

Pass-through of Losses may be passed through to and deducted by members subject to restrictions may be passed through to and deducted by partners, subject to restrictions


Fringe Benefits members are ineligible for certain fringe benefits partner’s are ineligible for certain fringe benefits

Fiscal Year must use the tax year of members having a majority interestmust use the tax year of partners having a majority interest

Tax upon Sale or Distribution of Appreciated Assets single tax at the member level upon sale; no tax upon distribution single tax at the partner level upon sale; generally no tax upon distribution

Tax to Entity upon Liquidation nonenone; gains on sale pass through to the partners

Tax to Owners upon Liquidation gains pass through to membersgains pass through to partners












Document Creating the Entity

Articles of


Articles of Incorporation

Partnership Agreement

Certificate of Limited Partnership

Operating Rules for Entity



By-laws & Shareholders’


Partnership Agreement

Partnership Agreement

Ownership of Business


(Membership Interest)



General Partners

(Partnership Interest)

General & Limited Partners

(Partnership Interest)

Management of Business

Members or Appointed Managers

Board of













ü  Keeping Records is Important to Your Business.

ü  Good records can show you what areas of your business are doing well and where there is a need for improvements.

ü  Good records are necessary to prepare accurate financial statements for banks, other creditors, and tax reporting.

ü  Good records can provide you with organized documentation needed when under examination by the IRS.

Record keeping systems can range from simple manual systems to computerized software packages.  The decision as to which type of system to implement is influenced by the nature of the business and the volume of transactions.  You should seek the professional advice of an accountant when choosing your system.  At a minimum your system should include:



A systematic listing of all accounts used by a company.


A general ledger contains all the asset, liabilities, and owner’s equity accounts in which all types of entries can be recorded.  It provides the balances in various accounts from which the financial statements can be prepared.


Record of all sales on account.


Record of all purchases on account


Record of all entries involving receipt of cash.


Record of all entries involving the payment of cash.


Record of sales made on credit by the company to individual customers.


Record of the current debts of the company on an individual vendor basis.


Record of the gross earnings, deductions, and net pay for each employee for each pay period


Permanent record of all assets purchased for use in the business.  Includes a description of the assets, date of purchase, cost, estimated life, and accumulated depreciation.


Record of the type, cost, and number of items on-hand for resale by a company.




The following is a list of suggested retention periods for your business documents.  Please consult your attorney and accountant for further assistance.


Retention Period Retention Period
Accident Reports & Claims Settled


Accounts Payable Ledgers-7 yrs

Minute Books of Directors & Stockholders, including By-laws -7yrs

Perm.Accounts Receivable Ledgers 7 yrs

Notes Receivable Ledgers 7 yrs

Audit Reports of Accountants Perm.

Option Records (expired)7 yrs

Bank Reconciliations 1 yr

Payroll Records & Summaries 7 yrs

Capital Stock & Bond Records Perm.

Petty Cash Vouchers 3 yrs

Cash Books Perm.

Physical Inventory Tags 3 yrs

Charts of Accounts Perm.

Plant Cost Ledgers 7 yrs

Check (cancelled, routine)7 yrs

Property Appraisals Perm.

Check (cancelled, Important)Perm.

Property Records Perm.

Contracts & Leases (expired)7 yrs

Purchase Orders 1 yr

Contracts & Leases (in effect)

Correspondence (general)Perm.

Purchase Orders (Purchasing Dept. Copy) 3 yrs

Correspondence (legal matters)Perm. 7yrs

Receiving Sheets 1 yr

Deeds, Mortgages, Bills of Sale Perm.

Requisitions 1 yr

Depreciation Schedules Perm.

Sales Records 7 yrs

Duplicate Deposit Slips 1 yr

Savings Bond Records 3 yrs

Employee Personnel Records(terminated) 3yrs

Scrap & Salvage Records

Stenographer’s Notebooks 7 yrs

1 yrEmployment Applications

Expenses Analyses and Distribution 3 yrs

Stock & Bond Certificates (cancelled) 7 yrs


Financial Statements 7 yrs

Perm.Stockroom Withdrawal Forms

Subsidiary Ledgers 1 yr

7 yrs General & Private Ledgers Perm.

Tax Returns & Worksheets Perm.

Insurance Policies (expired)3 yrs

Time Books 7 yrs

Insurance Records, Claims, Policies Perm.

Trademark Registrations Perm.

Internal Audit Reports 3 yrs

Voucher Register & Schedules 7 yrs


Invoices to Customers 7 yrs

Voucher for Payments to Vendors & Employees 7yrs

Invoices to Vendors 7 yrs




 The following Payroll Tax Returns must be filed in a timely manner in order to avoid substantial penalties:


            SS-4                Application for Employer Identification Number (EIN)

            W-4                 Employee’s Withholding Allowance Certificate

            Commonwealth of Pennsylvania – Combined Registration Form (PA 100)

To inform the Commonwealth that you are starting a new company.


            Circular E

A publication distributed by the IRS to provide guidance on payroll taxes and determining how much federal income tax to withhold from employees.


            Form 8109 – Federal Tax Deposit

For new employers, the Internal Revenue Service will send you a Federal Tax Deposit (FTD) coupon book approximately 5 to 6 weeks after you receive an Employer Identification Number (EIN).

Alternatively, the IRS is requiring many employers to file and pay Federal payroll taxes through the IRS electronic filing system.


            Form I-9.

Federal Employment Eligibility verification.

Pennsylvania New Hires Form (BUR 1575)




            Form 941 – Employer’s Quarterly Payroll Tax Return

All employers who withhold income tax, social security tax and Medicare tax from wages, tips, annuities, etc., are required to file Form 941.  The due date of Form 941 is the last day of the month following the quarter being reported.

1.         Social Security rate is 4.2% for employee and 6.2% employer.

2.         For Medicare all wages are taxed.  The Medicare rate is 1.45% for employee and employer.

3.         If you accumulate less than a $1,000 tax liability during a return period (e.g., during a quarter for Form 941), no deposits are required and you may pay the tax with the return for the period.  However, If you are unsure that you will accumulate less than $1,000, deposit under the appropriate rules so that you will not be subject to ‘failure to deposit’ penalties.

4.         An Employer should start filing a Form 941 with the first quarter in which taxes were required to be withheld.  Filing Due dates are:

    Quarter                             Dates

Jan-Feb-Mar                            April 30

Apr-May-June                         July 31

July-Aug-Sept                         October 31

Oct-Nov-Dec                          January 31


Most employees file electronically at

5.         After filing their first return, employers will receive a form from the IRS every three months.  The employer should use this form.  If a form is not received, the IRS local office has additional forms.


            State & Local Quarterly Income Tax Withholding Payroll Tax Returns

Returns are required at both the state and local level indicating the amount of tax due based on employee wages and applicable tax rates.  The current withholding rate for Commonwealth of Pennsylvania is 3.07%.

If the amount of tax withheld is less than $300, deposits are made on a quarterly basis.  If more than $300 but less than $1,000, deposits are made on a monthly basis.  If more than $1,000, deposit semi-monthly.

Most employers are now required to use Pennsylvania’s electronic employer system (etides).

A company is required to withhold local taxes from an employee residing within the locality of the company.  The local tax rate is generally between 1% and 2%. Many local taxes are also now filed and paid electronically.


            State Unemployment Tax Returns – UC-2

In the Commonwealth of Pennsylvania, Form PA UC-2 is the return used by employers to report the tax due by employers at the state level.  Currently, there is no tax assessed to the employee.

The unemployment compensation tax is determined by multiplying the first $8,000 paid to each employee by a predetermined percentage rate.  Once the employee’s wages reach a cumulative total of $8,000, the employer is no longer responsible for unemployment tax on that employee.  This tax is commonly referred to as SUTA.  The initial rate of this tax is usually 3.5%.

Currently, Pennsylvania imposes an additional surtax on employers, and a surtax to be withheld from employees.



            Form 940 – Federal Unemployment Tax Return

An annual return reporting the employer’s share of tax due for unemployment compensation at the federal level is due January 31.

An employer utilizing the services of one or more employees at least one day or paying wages of at least $1,500 in a calendar quarter is responsible for FUTA tax.

The 2010 tax is based on the first $7,000 of cumulative wages paid to each employee at a rate of 6.2%.  The employer may receive a partial credit of 5.4% against this tax based upon his state unemployment tax liability (SUTA).


            Form W-2 – Employment Wage and Tax Statement

This is a multiple part form summarizing all wages paid and taxes withheld from each individual employee.  Employers are required to distribute Form W-2 copies to their employees by January 31.  Employers must also forward a copy of Form W-2 to the Social Security Administration and State Revenue office by February 28.


            Form W-3 – Transmittal Form

Form used by employers to transmit all W-2 information, such as wages and taxes withheld to the Social Security Administration.  Form is due February 28.

            Form 1099

These forms are filed by payers when at least $10 in gross royalty payments or $600 in rents or services are disbursed in the course of a trade or business.

            Form 1096 – Transmittal Form

Form used by employers to transmit Form 1099 information to the Internal Revenue Service, due February 28.



            Federal Income Tax Withholding (FIT)

The tax rate for employees depends on the pay period, number of exemptions claimed, marital status, and the amount of gross wages.

            Social Security (FICA)

Tax Rate – Employee Withholding – 4.2%

Tax Rate – Employer – 6.2%


Tax Rate – Employee Withholding – 1.45%

Tax Rate – Employer – 1.45%

Taxable Base – Unlimited

            Pennsylvania Income Tax Withholding

Tax Rate – Employee Withholding – 3.07%

            Local Income Tax Withholding

Tax Rate – Employee Withholding – 1% to 2% (generally)

            Pennsylvania Unemployment Compensation

Tax Rate – Employer –      Set by the local unemployment office.  For 2010 the most likely rate for a new business will be 3.5%.

Taxable Base – $8,000 per employee.

            Federal Unemployment Tax (FUTA)

                        Employer Rate – 6.2% of wages paid during the year.

You can take credit against your FUTA tax for amounts you paid into state unemployment compensation funds.  This credit cannot be more than 5.4% of taxable wages.  The minimum FUTA tax that the employer is liable for is 0.8% of taxable wages.

Tax Base – $7,000


There may be ways of strengthening your insurance coverage that have not occurred to you.  This checklist is provided to help you identify areas of coverage that you should review with a qualified insurance advisor.

The checklist is divided into 3 categories:  (1) Essential Coverages, (2) Coverages that may be Desirable, and (3) Employee Benefits.


Essential Coverage’s

  • Fire Insurance
  • Other Perils
  • All-risk Contracts
  • Special protection for the loss by fire of accounts, currency, evidence of debt, securities
  • Co-insurance
  • Liability Insurance
  • $1,000,000 minimum?
  • Specific coverage for personal (libel, slander, etc.) injuries
  • Automobile Insurnace
    • Fleet policy versus single vehicles
    • Deductibles
    • Undersured motorist coverage
    • Uninsured motorist coverage
  • Workmen’s Compensation
    • Waive coverage for owner/employee
    • Proper classification of employees
    • Private disability insurance alternative for owners/key employees
    • Employer Rate – Amount depends on who you have coverage with and the amount of risk associated with the job.  You MUST have workmen’s compensation if you have any employees.

Desirable Coverages

  • Business Interruption Insurance

 Crimes Insurance

    • Burglary
    • Robbery
    • Comprehensive policies
    • Federal coverage

 Glass Insurance

    • Plate glass, signs, doors, showcases, etc.
    • Full coverage for ornamentation; lettering, etc.


  • Rent Insurance
    • Tenant
    • Landlord



Employee Benefits


  • Group Life Insurance
    • Coverage typically $50,000 or less
    • Conversion to private plans for terminating employees

Group Health Insurance

Disability Insurance

    • Group
    • Private


  • Key Man Insurance
    • Insure company from loss of Key Employee

Retirement Plans






            Checklist For Commercial Loans

Items 1-20 summarize the types of information you may need to provide to a lender.


may be used for start-up business or a buy-out of existing business.

Provide following information:

a)         Equity

b)         Assets (already existing assets and/or those to be purchased with loan proceeds

c)         Liabilities

d)         Projection of income and expenses (required for upcoming twelve (12) months)


Explanation of how firm will reach the projected income figure.

            3.         MONTHLY CASH FLOW PROJECTION

Not usually required, but should be utilized when possible, particularly if can support your request.

            4.         EXISTING BUSINESS DEBT

Include the following:

a)         Creditor’s name and address

b)         Purpose of loan

c)         Original loan amount

d)         Present loan balance

e)         Date loan was acquired, term of loan, interest rate, and amount of monthly installments, collateral used to secure these loans.

            5.         FEDERAL INCOME TAX RETURNS

Usually request past three (3) years

a)         For the business

b)         For the business owners

            6.         COLLATERAL USED TO SECURE LOAN

Include personal property

Include equipment to be bought with loan proceeds

Make an actual physical inventory

List in accordance with classification:

a)         Machinery and equipment

b)         Furniture and equipment

c)         Vehicles

d)         Other

Show: manufacturer or make model and serial number, size, year; purchased new, used or rebuilt.


            7.         DEEDS COVERING REAL ESTATE

If loan is to be secured by any type of real estate, a copy of the deed must be provided.


A separate statement will usually be required for each owner, partner or officer and any person or entity providing a guaranty on the loan.

            9.         FINANCIAL STATEMENTS

a)         Balance Sheet

b)         Profit and Loss Statements

c)         Aging of Accounts Receivable and Accounts Payable


Include a detailed history and specific function of firm

Include explanation of how loan will help the firm

            11.       DETAILED PERSONAL RESUME

Will usually be required for all owners or partners, including educational, technical, military, business and employment experience.

            12.       CREDIT REFERENCES

Include name, address, and account numbers

            13.       USE OF LOAN PROCEEDS

Give detailed explanation of use of loan proceeds; list each and their costs.

For Example:

Inventory                    10,000

Furniture                       8,000

Machinery                     3,000


Total                            21,000

            14.       BANKRUPTCY OR INSOLVENCY

If applicable, provide details if the business, or any owner, partner or officer has ever filed bankruptcy.

            15.       LAWSUITS

Provide details if the business or any owner, partner or officer is involved in any previous or pending lawsuits.


Do you or your spouse or any member of your household, or anyone who owns, manages, or directs your business or their spouses or members of their households work for the lender.

            17.       SUBSIDIARIES OR AFFILIATES

Provide the names and relationships with your business

Provide current balance sheet and operating statement for each

            18.       PERSONAL FINANCIAL CONCERN

Provide details if firm buys from, sells to, or uses the services of any concern in which someone in your company has a significant financial interest.

           19.       FRANCHISE

Include copy of franchise agreement

Include copy of FTC disclosure statement provided by franchiser


Include copies of leases, fictitious name filings, corporate certificates, and other such data.





Dauphin County Industrial Development Authority

2 South Second Street

Harrisburg, PA  17108        (717) 780-6250



Internal Revenue Service

Federal Building

228 Walnut Street

Harrisburg, PA  17101            (717)221-3490

Small Business Administration

100 Chestnut Street, Room 108

Harrisburg, PA  17101            (717)782-3840

PA Department of Revenue

Strawberry Square

Harrisburg, PA  17128       (717) 787-1064


Ben Franklin Technology Center

Central Northern Pennsylvania

Penn State Harrisburg, Crago Bldg.

777 West Harrisburg Pike, Rt. 230

Middletown, PA  17057   (717)  948-6399



227 West Market Street

Post Office Box 5046

York, PA  17405             (717)  843-5054

Entrepreneurial Assistance Office

PA Department of Community &

Economic Development

(800) 280-3801



 The Minority & Women Business Enterprise Office

502 North Office building

Harrisburg, PA  17125            (717)787-7380

Pursues contracting & subcontracting opportunities for minority & women business enterprises with state government.


Center for Entrepreneurial Assistance Department of Community & Economic Development

400 North Street, 4th Floor

Commonwealth Keystone Building

Harrisburg, PA  17120-0225



Bureau of Vocational-Technical Education

333 Market Street

Harrisburg, PA 17126          (717)  783-8506

Provides grants to train employees in specific skills to meet an individual employer’s needs, referred to as the Customized Job Training Program (CJT).


Division of Loans & Technical Assistance

490 Forum Building

Harrisburg, PA 17120          (717)  783-5046

Machinery & Equipment Loan Fund (MELF) used to provide low interest financing for machinery & equipment acquisitions, installations or upgrades of machinery & equipment directly related to the manufacturing process.

Bureau of Occupational & Industrial Safety

1529 Labor & Industry Building

Harrisburg, PA 17120           (717)  787-3323

Administrates the laws related to the safety of the public and employees.





Capital Region Chamber of Commerce

3211 North Front Street

Harrisburg, PA  17110

(717) 232-4099


West Shore Chamber of Commerce

4211 Trindle Road

Camp Hill, PA  17011

(717) 761-0702


Pennsylvania Chamber of Business & Industry

One Commerce Square

417 Walnut Street

Harrisburg, PA  17101

(800) 225-7225




 Initial Registration


During the initial registration, a new employer will receive all the necessary forms, tax returns, questionnaires, and copies of the resolutions, upon request, needed to register.

Information you will receive will include literature and forms regarding the Mercantile Tax, Business Privilege Tax, Occupational Privilege Tax and Earned Income Tax.

For example, in the City of Harrisburg, every new business is required to register with the Capital Tax Collection Bureau and the Mercantile Business License Department, located at 2301 North 3rd Street, Harrisburg, PA  17110.




Most political subdivisions in Pennsylvania levy Mercantile Taxes upon the privilege of doing business.  The percentage rate of the tax depends upon the jurisdiction in which the business resides.

 The Mercantile Tax focuses mainly on retail sales, wholesale sales, and restaurants.  Measurement of the tax liability is based on the actual gross receipts of the person doing business, without regard to the number of establishments maintained.


Check with the City Department of Licenses or the township or borough secretary’s office.




 The Business Privilege Tax is an excise tax on the privilege of doing business within a jurisdiction.  Often referred to as a universal business tax since it reaches out to all persons engaged in doing business.  To further explain, the Business Privilege Tax is levied on businesses when a taxing jurisdiction has no mercantile tax, or a business is not subject to an existing mercantile tax.

 Measurement of the Business Privilege Tax is based upon the gross receipts of persons doing business.  “Business” is defined as any activity carried on or exercised for gain or profit, but not limited to sale of merchandise or performance of services.

 All businesses, trades, and professionals where any service is offered to the public are liable for payment of this tax.  The only exclusions are manufacturing enterprises and those subject to preempting state taxes or license fees.



 The Occupational Privilege Tax is levied upon the privilege of engaging in an occupation within the district.  Each natural person who exercises such a privilege for any length of time during the tax year is liable for this tax unless he or she has previously paid the occupational privilege taxes for the calendar year to another taxing body within the Commonwealth of Pennsylvania.

 As an employer, you are required to withhold Occupational Privilege Tax from the compensation paid to an employee.  Only full time students employed part time and expected to earn less than $200 are excluded.



 Sales tax is an excise tax levied on retail sales of tangible personal property for use or consumption.  Sales tax has been commonly referred to as gross receipts tax, gross income tax, and retailer’s taxes.  Although the buyer generates sales tax by the purchase of retail goods, the retailer is responsible for reporting and paying the tax to the state.  The sales tax rate for Pennsylvania is 6% of the purchase price for taxable products or services.

 A sales tax number is required for each business before opening.  This number can be obtained from the PA Department of Revenue.  A sales tax return must be filed with the Department of Revenue.  The frequency of these returns is based on the average amount of sales tax generated.




Depending upon the nature of your business, a specific license or permit may be required authorizing you to transact the business of your choice.  A few of the most common licenses include:

Building and Zoning Permits

Cigarette Dealer’s License

Fuel Use Tax License

Sales Use & Hotel Occupancy Tax License

Promoter License

Small Games of Chance Distributor License

Transient Vendor Certificate

Liquor and Beer License

These summaries are for illustration purposes only.  Licenses and permits that may be necessary for your business may vary from those listed above.  Be sure to seek the professional advice of your attorney and accountant for additional assistance.



 The first step in estate planning is very personal.  You must decide who inherits which assets and when they should receive them.  A handful of the questions you need to consider are in the box shown below.


Estate planning is an easy thing to put off.  Maybe you think it’s too early; maybe you think your estate is too small.  Here are six good reasons why you should plan your estate now.

With a Plan

Without a Plan

1.         You decide who receives a share of             your assets State laws determine who inherits your assets – they could pass to an estranged relative.
2.         You decide how and when your             beneficiaries will receive their inheritance. The terms and timing are set by law.  Your children could be left unfettered control of a sizable estate.
3.         You decide who’ll manage your estate             (executor, trustee, etc.) The court appoints administrators – administrators whose ideas may not be compatible with your own.
4.         You can reduce estate taxes and             administrative expenses. Costs are usually greater, due to required administrative expenses and unnecessary taxes.
5.         You select a guardian for your child. The court appoints a guardian for your child.
6.         You can provide for the orderly             continuance or sale of a family business. Financial loss and family hardships may result from an untimely forced sale.


For those of you with an existing estate plan, the checklist on the following page can assist you in evaluating your plan’s effectiveness.





 Yes      No

1.         Do you have a will?

2.         Does your will name a guardian for your children if both you and your

spouse are deceased?

3.         Are you comfortable with the executor(s) and trustee(s) you have selected?

4.         Have you considered a living trust in order to avoid probate?

5.         If you have a living trust, have you titled your assets in the name of the trust?

6.         Are you taking full advantage of the marital deduction?

7.         If you want to limit your spouse’s flexibility over his or her inheritance, have you created a QTIP trust in your will?

 8.         Are both your estate plan and your spouse’s designed to take advantage of the $5,000,000.00 (effective 01/01/2012) exemption?

9.         Do you and your spouse each own enough assets directly in order to take advantage of the $5,000,000.00 (effective 01/01/2012) exemption?

 10.       Have you utilized an irrevocable life insurance trust to exclude insurance proceeds from being taxed in your estate?

11.       Are you taking maximum advantage of the $13,000.00 annual gift tax exclusion?

 12.       Have you created trusts that qualify for the annual gift tax exclusion?

 13.       Have you gifted assets that have a strong probability of future appreciation?

 14.       Have you considered a charitable remainder trust to provide income to your beneficiaries for a period of time with the remaining principal eventually passing to charity?

 15.       Have you considered a charitable income trust to provide income to charity for a period of years with the remaining principal eventually passing to your beneficiaries?

 16.       Do you have a management succession plan for your business?

 17.       Do you have a buy/sell agreement for your family business interests?

 18.       Have you considered a gift program involving your family owned business?

 19.       Are you sure you have the right amount and type of life insurance?

 20.       Are you sure your estate plan is up-to-date and takes into account all

potential tax-savings strategies?

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