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Waukesha Law Blog

Due diligence among the first steps in mergers and acquisitions

The mergers and acquisitions process breaks down into four phases, generally speaking. In a situation where two Wisconsin companies are merging or one company is acquiring another, the parties involved can expect to go through due diligence first, followed by the agreement phase, the integration phase and the value attainment phase.

Due diligence is the phase during which the parties undertake a detailed examination of the company to be acquired or both companies in a merger. Every part of a business should be evaluated as part of due diligence, including human resources, assets and liabilities, intellectual property, finances and technology. It may also be valuable to examine information technology integration across and throughout the companies during due diligence as well.

Create a quality shareholders' agreement

If you are the head, founder or primary owner of a company in Wisconsin whose stock is publicly traded on the stock market, you have shareholders to answer to. As stockholders own bits and pieces of the business, they expect to know what is going on with the company and they expect you to protect their rights as shareholders. A quality shareholders' agreement is what you need to protect the company and its stockholders.

What information would I find in a quality shareholders' agreement? Can I draw up this contract myself? What happens if there is a breach of contract?

Effects of the TCJA on alimony, child tax exemptions

The 2017 passage of the Tax Cuts and Jobs Act by Congress means that the cost of divorce may rise for some couples in Wisconsin. The act changes how people claim children on their taxes and eliminates alimony from tax considerations altogether.

Parents used to be able to take turns claiming their children as exemptions, but this will no longer be possible. Instead, there will be a significant deduction for claiming head of household. The head of household must be single, have a dependent in the home more than 50 percent of the time and pay over half of the expenses in the household. The child tax credit is also available to the head of household. The IRS has not issued a regulation to clarify whether the child tax credit is tradeable, but parents can include as part of their divorce agreement that it is tradeable if allowed by regulations.

Figuring out fair support when parents have joint custody

Wisconsin parents who are negotiating custody or placement will also need to figure out child support payments. The process to figure both of these important aspects of life after divorce is complex and can become even more so if animosity arises. In fact, some experts believe that child support payments should not even exist when parents equally split custody since support exists to cover a child's needs not to equalize income or lifestyle.

Placement and support are separate family law matters. Before support can be negotiated, parents need to figure out placement. For both parents to have equal rights to the medical, religious and educational decisions, they need to go agree to joint legal custody. Without this, the non-custodial parent loses their right to take their injured child to an ER, to attend parent-teacher conferences or request report cards. After this has been established, the parents then need to focus on physical custody, which should generally be shared in a 50-50 split by both parents.

Estate planning important for business continuity

Entrepreneurs in Wisconsin may draw an unexpected lesson from the passing of legendary musician Aretha Franklin. Reports on her death have noted that despite her $80 million estate and valuable music catalog, she died without a will or estate plan in place. Franklin is not alone in the pantheon of great musicians to pass away without a will. Prince died suddenly in 2016 at the age of 57, leaving behind a legendary catalog of music and a $300 million estate. Since he passed away without a will, his estate continues to be the subject of court proceedings and debates among his heirs.

While in some cases the standard state distributions to spouses and children may work seamlessly, having a will can help to avoid disputes and prevent discord within the family. In addition, for people with specific valuable property like a privately owned small business, making a will and succession plan is particularly important.

Financial experts predict flat commercial property prices

Research from some financial experts in the real estate industry indicates that commercial property pricing trends have stabilized and will likely to stay steady for at least six months to a year. Part of the reason for this phenomenon is that interest rates have ceased declining and have even risen. Since the economy continues to do well, the Federal Reserve is likely to raise the prime rate again by the end of 2018.

Lenders continue to supply plenty of debt for real estate acquisitions, and many believe that investors are still looking to inject a lot of capital into the commercial property sector. Among all commercial real estate sectors, office space is likely to be the least attractive due to capital expenditure requirements. The supply level of office space is also above the long-term average, so significant growth is unlikely.

What should you consider when choosing a business name?

You have finally made the decision to move forward with starting your own business. You and any other individuals you have on your team may feel immensely excited about taking on this venture. Though you have many steps ahead of you, starting with the most basic elements may be wise.

You could already have a name for your business picked out in your mind, but it is important that the name not only helps your company, but also complies with any necessary legal requirements. Therefore, it may work in your best interests to keep in mind some good practices when it comes to choosing a business name.

Estate planning errors when donating to charity

People in Wisconsin who want to leave a portion of their estates to charity and the rest to loved ones should make sure to avoid making common mistakes. It is important to take into account the value of an account after tax.

An example might be a person who has a home, an after-tax savings account and an IRA that are each worth $1 million. The first two items are passed down using a will or a trust. An IRA, along with assets such as a thrift savings plan and a 401(k), is passed with a beneficiary designation. The person may use the beneficiary designation to pass the IRA to children. The will or trust may leave the home to the children along with $900,000 of the after-tax savings account. The charity would get $100,000.

Internet commerce may change industrial real estate

Many real estate developers in Wisconsin are already thinking about how to tailor their next commercial real estate projects to appeal to a rising market: the young people of Generation Z. It is the generation that follows the much-discussed Millennials, and its members were born in 1996 or later. While many "Gen Z" youth are too young to invest or buy into real estate projects, its oldest members are graduating from college, entering the workforce and developing their investment and real estate portfolios. As a result, developers are looking to create new projects with timeless appeal that also speak to the specific concerns and desires of this growing market.

While much has been said about the rise of online shopping and the potential threat that it presents to retail, it also introduces strong opportunities in the industrial and warehouse sectors. A growing number of distribution centers and warehouses, especially those close to large consumer markets, will need to be built as delivery becomes faster and closer to home. As internet commerce continues to grow, the physical infrastructure to support these sales will need increasing development. Another factor that could affect future industrial development is the growth in 3D printing. As the technology improves, people could order items to be printed to personal specifications, changing the face of manufacturing.

People are more likely to divorce if their friends have

Married couples in Wisconsin and elsewhere are 75 percent more likely to divorce if they have friends who have divorced, according to a study conducted by researchers at Brown University, Harvard University and the University of California, San Diego. It additionally found that people are 33 percent more likely to divorce if they know a friend of a friend who has gotten divorced.

Relationship experts say that watching friends get divorced alerts people that ending their marriage is an option. The experience can also provide information about what occurs during a divorce and how to prepare for one. Meanwhile, a newly divorced friend could start a new relationship, which might look more romantic and exciting than a dull marriage.

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