The Power of Ownership
Dr. Larry McClelland, DBA February 12, 2025
The Power of Ownership in simple terms refers to the legal rights and control that a property owner or business owner has over the property or business they legally own. The owner has complete flexibility to use, possess, and dispose of this property or business as freely as they desire to if they remain legally within the bounds of the law within their jurisdiction of city, state and federal laws. Although, the property or business owner has significant power over the property or business, it is not absolute. The owner must pay close attention to the literature of the laws and regulations, which can have some inclusive restrictions when it comes to transferal, zoning laws, environmental regulations, and or property tax laws.
Ownership PowerWhen dealing with these various actions with your property, you should be tentative or aware of these examples of the power you do have when it comes to the power of ownership: - Use of Property: Living in a house, operating a business, or land ownership. - Possessing the Property: Maintaining control and access to the property - Leveraging the Property: - Disposing of the Property: Selling, renting, or gifting the property to others. - Transferring Ownership: Passing the property on to heirs or selling it to a new owner.
Understanding the Definitions of Tangible and Intangible PropertyProperty ownership can extend to both tangible assets (like land, buildings, and personal belongings) and intangible assets (like intellectual property rights). When it comes to Homeownership, consumers must realize the differences between owning and renting. Ownership gives one an intangible benefit of the sense of stability and the pride of being a homeowner. With this comes the tangible responsibilities of tax deductions and equity. On the flip side, renting does not always lead to a feeling of throwing your money away every month, your financial stability in life at the current time speaks to this feeling. The other point to this is that ownership does not always lead to wealth building because your end goal must be financially sound and stable. On the business side to this ideology, one must understand how owning a sound business can equally attribute this notion of tangible and intangible property or business ownership.
Power of AttorneyPower of attorney (POA) is a legal document that grants someone the authority to act on behalf of the property owner, allowing them to manage or dispose of the property on their behalf. The person who receives the authority is referred to as the agent or attorney-in-fact. The subject of the POA is called the principal. The most common use of a POA is used to continue the legality of a document or legal proceeding in the absence of the principal person or if they become temporary or permanently ill or disable. If you own property or a business, you should explore all your options carefully and ensure you have a POA in place in case you have an unforeseen scenario to arise.
Eminent DomainThe government also has the power to take private property for public use, even if the owner doesn't want to sell, through the process of eminent domain, but must provide just compensation to the property owner. Unfortunately, the federal, state, and local government can exercise eminent domain if they clearly justify compensation at fair market value or greater through professional appraisal processes. In most cases, this power is typically used for public projects like roads, schools, parks, and infrastructure, but can also be used for economic development in some cases. The Fifth Amendment to the U.S. Constitution allows eminent domain, but it requires that the government pay "just compensation" to the property owner. The process of the government taking property through eminent domain is often called "condemnation". You do have the right to take the government to court to keep or maintain your property. There have been cases where the citizen has won cases involving eminent domain. There are protections in place for owners of properties and businesses. Trust A trust is a legal arrangement where a person, the trustor or grantor, transfers assets to a trustee to manage and distribute for the benefit of a beneficiary or beneficiaries according to the trustor's instructions. The main purpose of a trust is to manage and distribute assets according to the trustor's wishes, often to protect assets, minimize taxes, and ensure a smooth transfer of wealth to beneficiaries, while also potentially avoiding probate. In ownership, it makes good sense to set up trusts for various reasons, including asset protection, estate tax reduction, control over asset distribution, privacy, and planning for incapacity or special needs. There are several things an owner of assets must know about when deciding to setup a trust to protect those assets. Fiduciary Relationship: A trust establishes a fiduciary relationship, meaning the trustee has a legal and ethical obligation to act in the best interests of the beneficiaries. Asset Management: The trustee holds and manages the assets within the trust, following the terms outlined in the trust document. Trust Document: A trust is created through a legal document, the trust deed, which specifies the terms of the trust, including the trustee, beneficiaries, and how assets should be managed and distributed. Trustor/Grantor: The person who creates the trust and transfers assets into it. Beneficiary: The person(s) or entity(ies) who will benefit from the trust's assets. Types of Trusts: Trusts can be revocable (can be changed or terminated) or irrevocable (cannot be changed or terminated), living (created during the trustor's lifetime) or testamentary (created in a will), and funded (assets are immediately placed in the trust) or unfunded (assets are added later). Purposes of Trusts: Trusts can be used for various purposes, including estate planning, asset protection, tax planning, and managing assets for minors or individuals with disabilities. Estate Planning: Trusts can help ensure that assets are distributed according to the trustor's wishes, avoid probate, and potentially reduce estate taxes. Asset Protection: Trusts can help protect assets from creditors or lawsuits. Tax Benefits: Trusts can offer tax advantages, such as minimizing estate taxes. Professional Advice: Establishing a trust often requires the assistance of an estate planning attorney or financial advisor.
Whe you decide that it is time to setup a trust, I recommend you researching this information first before contacting a law firm to assist you with setting up your trust. The Internal Revenue Service (IRS) is the primary government agency that deals with trusts, particularly concerning their tax implications and reporting requirements. IRS Role: The IRS is responsible for ensuring that trusts comply with federal tax laws, including filing tax returns and paying taxes on income generated by the trust assets. Trust Tax Forms: Trusts use specific IRS forms to report their income and file tax returns, such as Form 1041 (U.S. Income Tax Return for Estates and Trusts). Trust Types: The IRS deals with various types of trusts, including revocable and irrevocable trusts, and those created for specific purposes like special needs trusts. Beneficiaries: The IRS also considers the beneficiaries of trusts when determining tax obligations, especially in cases where trust income is distributed to beneficiaries. Other Agencies: While the IRS primarily handles the tax aspects of trusts, other government agencies may have oversight in specific areas, such as the Department of the Treasury for Social Security trust funds or the Federal Deposit Insurance Corporation (FDIC) for trust accounts at insured banks. State Level: State governments also have a role in trust law, particularly in areas like trust creation, administration, and enforcement, as trust law is generally a state matter. Trustee Duties: Trustees have a fiduciary duty to manage the trust assets for the benefit of the beneficiaries, and they are responsible for reporting and paying taxes on trust income. Trust Documents: Trust documents, such as the trust agreement, are crucial for understanding the terms of the trust and the rights and responsibilities of the trustee and beneficiaries. Trust Types: There are various types of trusts, including revocable trusts, irrevocable trusts, living trusts, and testamentary trusts, each with its own tax implications and legal requirements. Tax Evasion: The IRS also addresses abusive trust tax evasion schemes.
Copyright © 2025 Larry McClelland, LLC. All Rights Reserved.
Ownership PowerWhen dealing with these various actions with your property, you should be tentative or aware of these examples of the power you do have when it comes to the power of ownership: - Use of Property: Living in a house, operating a business, or land ownership. - Possessing the Property: Maintaining control and access to the property - Leveraging the Property: - Disposing of the Property: Selling, renting, or gifting the property to others. - Transferring Ownership: Passing the property on to heirs or selling it to a new owner.
Understanding the Definitions of Tangible and Intangible PropertyProperty ownership can extend to both tangible assets (like land, buildings, and personal belongings) and intangible assets (like intellectual property rights). When it comes to Homeownership, consumers must realize the differences between owning and renting. Ownership gives one an intangible benefit of the sense of stability and the pride of being a homeowner. With this comes the tangible responsibilities of tax deductions and equity. On the flip side, renting does not always lead to a feeling of throwing your money away every month, your financial stability in life at the current time speaks to this feeling. The other point to this is that ownership does not always lead to wealth building because your end goal must be financially sound and stable. On the business side to this ideology, one must understand how owning a sound business can equally attribute this notion of tangible and intangible property or business ownership.
Power of AttorneyPower of attorney (POA) is a legal document that grants someone the authority to act on behalf of the property owner, allowing them to manage or dispose of the property on their behalf. The person who receives the authority is referred to as the agent or attorney-in-fact. The subject of the POA is called the principal. The most common use of a POA is used to continue the legality of a document or legal proceeding in the absence of the principal person or if they become temporary or permanently ill or disable. If you own property or a business, you should explore all your options carefully and ensure you have a POA in place in case you have an unforeseen scenario to arise.
Eminent DomainThe government also has the power to take private property for public use, even if the owner doesn't want to sell, through the process of eminent domain, but must provide just compensation to the property owner. Unfortunately, the federal, state, and local government can exercise eminent domain if they clearly justify compensation at fair market value or greater through professional appraisal processes. In most cases, this power is typically used for public projects like roads, schools, parks, and infrastructure, but can also be used for economic development in some cases. The Fifth Amendment to the U.S. Constitution allows eminent domain, but it requires that the government pay "just compensation" to the property owner. The process of the government taking property through eminent domain is often called "condemnation". You do have the right to take the government to court to keep or maintain your property. There have been cases where the citizen has won cases involving eminent domain. There are protections in place for owners of properties and businesses. Trust A trust is a legal arrangement where a person, the trustor or grantor, transfers assets to a trustee to manage and distribute for the benefit of a beneficiary or beneficiaries according to the trustor's instructions. The main purpose of a trust is to manage and distribute assets according to the trustor's wishes, often to protect assets, minimize taxes, and ensure a smooth transfer of wealth to beneficiaries, while also potentially avoiding probate. In ownership, it makes good sense to set up trusts for various reasons, including asset protection, estate tax reduction, control over asset distribution, privacy, and planning for incapacity or special needs. There are several things an owner of assets must know about when deciding to setup a trust to protect those assets. Fiduciary Relationship: A trust establishes a fiduciary relationship, meaning the trustee has a legal and ethical obligation to act in the best interests of the beneficiaries. Asset Management: The trustee holds and manages the assets within the trust, following the terms outlined in the trust document. Trust Document: A trust is created through a legal document, the trust deed, which specifies the terms of the trust, including the trustee, beneficiaries, and how assets should be managed and distributed. Trustor/Grantor: The person who creates the trust and transfers assets into it. Beneficiary: The person(s) or entity(ies) who will benefit from the trust's assets. Types of Trusts: Trusts can be revocable (can be changed or terminated) or irrevocable (cannot be changed or terminated), living (created during the trustor's lifetime) or testamentary (created in a will), and funded (assets are immediately placed in the trust) or unfunded (assets are added later). Purposes of Trusts: Trusts can be used for various purposes, including estate planning, asset protection, tax planning, and managing assets for minors or individuals with disabilities. Estate Planning: Trusts can help ensure that assets are distributed according to the trustor's wishes, avoid probate, and potentially reduce estate taxes. Asset Protection: Trusts can help protect assets from creditors or lawsuits. Tax Benefits: Trusts can offer tax advantages, such as minimizing estate taxes. Professional Advice: Establishing a trust often requires the assistance of an estate planning attorney or financial advisor.
Whe you decide that it is time to setup a trust, I recommend you researching this information first before contacting a law firm to assist you with setting up your trust. The Internal Revenue Service (IRS) is the primary government agency that deals with trusts, particularly concerning their tax implications and reporting requirements. IRS Role: The IRS is responsible for ensuring that trusts comply with federal tax laws, including filing tax returns and paying taxes on income generated by the trust assets. Trust Tax Forms: Trusts use specific IRS forms to report their income and file tax returns, such as Form 1041 (U.S. Income Tax Return for Estates and Trusts). Trust Types: The IRS deals with various types of trusts, including revocable and irrevocable trusts, and those created for specific purposes like special needs trusts. Beneficiaries: The IRS also considers the beneficiaries of trusts when determining tax obligations, especially in cases where trust income is distributed to beneficiaries. Other Agencies: While the IRS primarily handles the tax aspects of trusts, other government agencies may have oversight in specific areas, such as the Department of the Treasury for Social Security trust funds or the Federal Deposit Insurance Corporation (FDIC) for trust accounts at insured banks. State Level: State governments also have a role in trust law, particularly in areas like trust creation, administration, and enforcement, as trust law is generally a state matter. Trustee Duties: Trustees have a fiduciary duty to manage the trust assets for the benefit of the beneficiaries, and they are responsible for reporting and paying taxes on trust income. Trust Documents: Trust documents, such as the trust agreement, are crucial for understanding the terms of the trust and the rights and responsibilities of the trustee and beneficiaries. Trust Types: There are various types of trusts, including revocable trusts, irrevocable trusts, living trusts, and testamentary trusts, each with its own tax implications and legal requirements. Tax Evasion: The IRS also addresses abusive trust tax evasion schemes.
Copyright © 2025 Larry McClelland, LLC. All Rights Reserved.
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