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Gay business owners need life insurance

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By MICHAEL GLASSMAN

As a small business owner, what happens to the business or your partner if one of you is no longer around?

Life insurance can provide a solution.

Let’s say that two men who are equal partners run an IT company that’s valued at $10 million. One is heterosexual and married; the other is gay with a domestic partner. Let’s say that the gay man dies. Who owns the business now? The male married partner and the domestic partner (if he was legally married or had executed a will and trust) would now co-own the business, but the latter knows nothing about the IT business.

Then, let’s say the domestic partner calls the business partner daily to ask for his money. The deceased partner used to bring home $5,000 a week. His business partner is now running the business without the benefit of the deceased, possibly creating a shortfall in available income. Additionally, there could be tax implications on his share of the business, valued at $10 million.

If each partner had $5 million worth of life insurance and named their respective spouse or domestic partner as beneficiaries, they would have been able to pay off the other partner and buy him out with the $5 million policy.

Life insurance can, for example:

• Protect a business or business owner from financial loss – including the loss of control of a part of the business – as a result of the death of a partner or co-owner. As part of a buy-sell agreement, the policy’s death benefit can be used to help purchase the deceased partner’s shares from his or her estate.

• Protect a business from loss as a result of the death of a key employee. The policy’s death benefit can provide a cushion that enables the company to continue operating while seeking a replacement.

• Be used as a highly valued employee benefit for key personnel whose loved ones can benefit in the event of the employee’s death.

Plan ahead for your personal estate:

Most states do not recognize lesbian and gay relationships, so you need to be aware of the laws of your state.

A significant percentage of your estate may go toward tax liabilities. Property taxes, income taxes, gift taxes, and estate taxes are all areas of concern. Lesbian and gay couples who cannot legally marry or partner in their state do not have the same tax benefits as heterosexual couples. Additionally, even those legally married or partnered do not have the same federal tax benefits that married heterosexual couples do.

Did you realize that your assets owned at death are generally subject to federal and state taxes? A significant percentage of your estate may go toward tax liabilities. Unless you plan ahead, your legacy becomes open to public scrutiny through the probate process. There are steps you can take to help make sure that your loved ones, possessions and passions are taken care of in the manner you wish, and that your affairs remain confidential.

When thinking about the future, consider how your family will be cared for, who will inherit property, and how assets will be distributed.

• What happens to your property after you pass away?

• How will loved ones maintain their standard of living?

• How will your estate pay final expenses and taxes?

• Can your taxable estate be reduced with lifetime gifting strategies?

• How may the transfer of your assets be impacted by federal gift and estate tax guidelines?

A well-designed strategy can provide you a way to accumulate, conserve and protect your assets during your lifetime.  At the heart of many estate and tax plans, is a versatile tool called a “Trust.” A “Trust Agreement” is a legal document that establishes a Trust and enables it to hold property for the benefit of a third party.

A common technique to minimize estate taxes involves an Irrevocable Life Insurance Trust (ILIT). A properly structured and administered ILIT may keep your life insurance policy’s death benefit out of your estate, so proceeds will benefit the people and places you care about most.

At the very least, you should have a will, a durable general Power of Attorney for finances or healthcare to allow an agent to act on your behalf if you become incapacitated. Have an advanced directive, such as a living will and a healthcare proxy, and a HIPAA authorization to permit your partner to have access to your medical information so your provider or insurance company has no reservations about sharing your protected medical information with them. You should also have a Parenting Agreement if you have children and a Domestic Partnership Agreement if you’ve been together for some time.

Michael Glassman is with The Washington Group in Bethesda. Reach him at 301-581-7277 or [email protected]. For more information, visit financialguide.com/michael-glassman.

CORRECTION: Last week’s Blade Business column was authored by Nancy Ortmeyer Kuhn. The name of her firm was incorrectly listed. The correct name of the firm is Jackson & Campbell. The Blade regrets the error.

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Real Estate

Prepare your rental property for the back-to-school market

Strategic pricing is critical to standing out

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The rental market explodes in August and September as schools return to session.

As we approach August and September, the rental market in Washington, D.C. undergoes a significant transformation. The supercharged demand earlier in the year resulting from the influx of families wanting to move in before the new school year and higher ed students returning for their studies starts to wane. For landlords, this period is a crucial time to ensure their properties are appealing and priced competitively. A well-prepared rental property can make all the difference in securing a successful lease. Here are some tips to help you get your property ready for the back-to-school season.

Be Wise, Compromise: Navigating Pricing Strategies

The adage “Be Wise, Compromise” rings especially true as we head into August and September. It’s a period where strategic pricing becomes critical to stand out among a glut of rentals on the market and the tendency to “fire sale.” The rental market demand starts slowing down in August, but it is taking steep hits by September. If your property remains without a lease by the end of August, consider adjusting your rental price to attract tenants.

Lowering your price during August can be a smart move to avoid vacancies, but don’t wait too long. By September, you might face tougher competition as other landlords drop their prices too. Meeting the market demand head-on with a competitive price ensures you don’t miss out on securing a tenant before the academic year begins.

What Renters with School-Age Children Want

Families with school-age children have specific needs and preferences when searching for a rental property. Here are some key features to focus on:

  1. Proximity to Good Schools: If your property is within a highly regarded school district you are ahead of the game. Make sure the rental ad includes correct links and updated public information on school districts but be cautious from sounding like you are searching only for families with small children. That could run afoul of Fair Housing laws.  
  2. Functional Space: Families need ample space. If your rental property offers enough bedrooms, storage areas, and a functional layout that accommodates the needs of a family with children you might seriously consider that market segment as a desirable tenant.
  3. Outdoor Areas: An ample yard or nearby parks and play areas are big selling points. Outdoor spaces provide areas for children to play and families to enjoy.
  4. Community Amenities: Proximity to community centers, libraries, recreational facilities and splash parks can make your rental more attractive to families than others.

Timing is also critical. Families with school-aged children wish to move in before the school year starts, so aim to have your property ready and listed for rent early.  I recommend counting on 6-8 weeks before a move-in date.. This gives you a better chance of finding those tenants who are planning ahead and interested in signing a lease well before the targeted move-in date, settling in before the first school bell rings.

The D.C. Higher Education Hub

In addition to families with young children heading back to school on Aug. 26, the Washington, D.C., metro area boasts a remarkable concentration of higher education programs. According to a recent discussion on The1A.org, this region is home to an inordinately high number of prestigious educational institutions, including my alma mater, Johns Hopkins University, which has consolidated its graduate programs in D.C. into one location at the old Newseum location on Pennsylvania Avenue, N.W. All higher education institutions residing here bring a reliable and annual stream of new students in need of housing, particularly before the new academic year approaches.

Attracting Student Tenants: Essential Preparations

With a considerable student population in D.C., attracting this demographic requires understanding their unique needs.  Remember to refrain from sounding like you are searching only for students to avoid going against Fair Housing laws.  

  1. Affordability: Students are often budget-conscious. Offering flexible lease terms, such as 9-month leases that align with the academic year, can be very appealing.
  2. Proximity to Campuses: If the rental is located particularly close to a school, highlighting it in a list of what is nearby in the community can help those searching for rental housing off campus.  The convenience of a short commute is an important factor for students.
  3. Amenities and Furnishings: Students appreciate furnished or partially furnished rental homes, high-speed internet, and study-friendly environments. Ensuring your property has these amenities can give you a competitive edge, particularly if your rental is relatively close to a campus geographically.
  4. Roommate-Friendly Layouts: Properties with multiple bedrooms and shared common areas are ideal for student roommates. If the layout supports a co-living arrangement with a one bedroom to one bathroom ratio, all the better!
  5. Public Transportation Access: Easy access to public transportation is crucial for students who may not have their own vehicles. A short commute on public transportation or by using bike-friendly streets is also very desirable. 

Get Ready for Back to School

August is the perfect time to prepare your rental property for the back-to-school season. Here’s a checklist to ensure you’re ready:

  1. Conduct Maintenance Checks: Ensure all appliances, plumbing, and electrical systems are in top condition. Address any repairs or maintenance issues promptly.
  2. Enhance Curb Appeal: First impressions matter. Make sure the exterior of your property is well-maintained, with trimmed lawns, clean walkways, and fresh exterior paint if needed.
  3. Safety Upgrades: Install or upgrade smoke detectors, carbon monoxide detectors, and ensure a fire extinguisher is wall-mounted and readily accessible in the kitchen.
  4. Deep Cleaning: A thorough cleaning can make your property shine. Consider hiring professionals to ensure every corner is spotless including windows.
  5. Marketing and Listings: Update your property listings with attractive photos and detailed descriptions. 

The Rental Market Dynamics: August and September

Understanding the rental market dynamics during August and September can help you strategize effectively. August typically sees a slowdown, but September’s drop in demand means if rental properties have not yet closed the deal on a rental agreement, you will need a sense of urgency to price it right to rent.

Lowering your price slightly or with a stair-step approach every few weeks starting at the end of August can help attract those prospective tenants who are still looking and those making last-minute decisions on their housing needs. 

Preparing your rental property for the back-to-school season in Washington, D.C. involves a combination of strategic pricing, understanding tenant needs, and ensuring your property is in top condition. By focusing on strategic pricing you can navigate the market dynamics of August and September successfully. Remember, be wise and compromise where necessary to ensure your property stands out and attracts those tenants who reach the peak of their search in late summer, just in time for the academic year.

(This article was written with some assistance from AI.)

Scott Bloom is owner and Senior Property Manager, Columbia Property Management. For more information and resources, go to ColumbiaPM.com.

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Real Estate

Exploring LGBTQ-friendly neighborhoods across the U.S.

Finding your safe haven, knowing your rights

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D.C.’s Dupont Circle remains one of the best-known LGBTQ-friendly neighborhoods in the country. (Washington Blade file photo by Michael Key)

Finding a safe and inclusive community is paramount for LGBTQ individuals seeking a place to call home. Throughout the United States, various neighborhoods have become havens for our LGBTQ community, offering not only welcoming environments but also rich cultural scenes, diverse housing options, and vital community resources. 

The evolution of LGBTQ neighborhoods in the U.S. is deeply intertwined with the history of LGBTQ rights and activism. From the Stonewall Uprising in New York City to the Harvey Milk era in San Francisco, these neighborhoods have been at the forefront of social change. They serve as cultural and historical landmarks, symbolizing the resilience and strength of the LGBTQ community.

Top LGBTQ-Friendly Neighborhoods Across the U.S.

San Francisco – The Castro: The Castro is renowned for its rich LGBTQ history and vibrant community. Known as one of the first gay neighborhoods in the U.S., it offers a variety of local businesses, annual events like the Castro Street Fair, and an inclusive atmosphere that attracts both residents and tourists.

New York City – Greenwich Village: Greenwich Village holds a special place in LGBTQ history, being the site of the Stonewall Inn. Today, it remains a cultural hub with numerous LGBTQ-friendly bars, cafes, and shops. The Village’s historic charm, combined with its progressive vibe, makes it a desirable location for many.

Chicago – Boystown: Boystown, officially known as Northalsted, is one of the most recognized LGBTQ neighborhoods in the Midwest. It boasts a lively nightlife, an array of LGBTQ events such as the annual Pride Parade, and a supportive community. The neighborhood’s diverse housing options cater to various preferences and budgets.

Atlanta  – Midtown: Midtown Atlanta is a thriving LGBTQ community with a robust cultural scene. It’s home to the iconic Atlanta Pride Festival and numerous LGBTQ-friendly establishments. The neighborhood’s blend of urban living and Southern charm attracts a diverse group of residents.

Seattle – Capitol Hill: Capitol Hill is Seattle’s epicenter of LGBTQ life, known for its inclusive atmosphere and vibrant nightlife. The neighborhood hosts events like Seattle Pride and offers a wide range of housing options, from historic homes to modern apartments. Capitol Hill’s progressive environment makes it a welcoming place for all.

Washington, D.C. – Dupont Circle: Dupont Circle is a historic and cultural hub for the LGBTQ community in D.C. Known for its vibrant nightlife, diverse dining options, and numerous LGBTQ-friendly businesses, Dupont Circle offers a welcoming atmosphere for residents and visitors alike. The neighborhood is also home to several LGBTQ organizations and events, making it a supportive and inclusive place to live.

Navigating the real estate market as an LGBTQ individual involves understanding both the market trends and the unique needs of the community. Here are some tips to consider:

Work with LGBTQ-Friendly Real Estate Agents: Finding an agent who understands the needs of LGBTQ clients can make the home-buying process smoother. The agents at GayRealEstate.com are often more knowledgeable about LGBTQ-friendly neighborhoods and legal protections.

Understand Legal Protections: Ensure you are aware of local and state laws that protect against discrimination based on sexual orientation and gender identity. The Fair Housing Act provides some protections, but it’s essential to understand additional state and local regulations.

Consider Community Resources: Look for neighborhoods with robust LGBTQ community centers, support groups, and events. These resources can provide invaluable support and help you integrate into the community.

Evaluate Housing Options: From historic neighborhoods to modern developments, evaluate the types of housing available in your desired area. Consider factors like proximity to LGBTQ+-friendly businesses, safety, and community vibe.

Resources and Support

Numerous organizations and resources support LGBTQ home buyers and renters nationwide:

  • GayRealEstate.com: Provides a network of LGBTQ and allied real estate professionals.
  • Lambda Legal: Offers legal assistance and information on LGBTQ housing rights.
  • Human Rights Campaign: Provides resources on LGBTQ equality and advocacy.

Finding a safe and welcoming community is essential for LGBTQ individuals seeking a new home. By exploring neighborhoods known for their inclusivity, working with knowledgeable real estate agents, and leveraging community resources, you can find a place where you truly belong. Whether you’re considering The Castro, Greenwich Village, Boystown, Midtown, Capitol Hill, or Dupont Circle each neighborhood offers unique opportunities and a supportive environment.

At GayRealEstate.com, we’re committed to helping you find your safe haven in cities throughout the United States and Internationally. Explore these neighborhoods and connect with resources to make your home-buying journey a positive and empowering experience. Together, we can create a future where everyone can live authentically and safely.

Jeff Hammerberg is founding CEO of Hammerberg & Associates. Reach him at 303-378-5526 or [email protected].

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Real Estate

Real Estate in 1776

A revolutionary transformation of land ownership laws began centuries ago

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In 1776, the United States was on the brink of a revolutionary transformation in terms of land ownership.

I have been interested in real estate most of my life. Even at age eight, during family vacations when we drove to Nana’s house via old, country roads, I would point to any wood frame house in disrepair and talk about fixing it up. 

It got to be a joke in our family. My father would join in, pointing to every dilapidated barn we passed and saying, “Here’s one you could fix up.”  Little did he know that my childhood interest in real estate would make up a big part of my future.

That’s but a small part of my real estate history, but since I was born on Independence Day, I thought I’d relay a few facts about the real estate world of nearly 250 years ago. Turns out, it’s remarkably similar to today.

In 1776, the United States was on the brink of a revolutionary transformation (as we may also be in 2024), not only politically but also in terms of land ownership and real estate. This era was characterized by a blend of colonial practices, evolving legal frameworks, and a growing sense of independence, having separated ourselves from British rule.

Land ownership then, as now, was a primary source of wealth and status. Its distribution was highly uneven. Most of the land in the Thirteen Colonies was controlled by a small elite class, including wealthy merchants, planters, and colonial governors. 

These large landowners acquired vast tracts of land through royal grants, purchases, and inheritance. Small farmers, artisans, and laborers either owned modest parcels of land, paid to work on rented property, or became indentured servants as immigrants. 

The legal framework governing real estate in 1776 was a combination of English common law, colonial statutes, and local customs. Property rights were well-established, with deeds, surveys, and title records playing crucial roles in documenting and securing land ownership. Colonial courts adjudicated land disputes, often referencing English legal precedents.

The doctrine of primogeniture mandated that a family’s land holdings be passed down to the eldest male heir. This practice ensured the preservation of large estates but also contributed to social stratification and limited opportunities for younger sons and women. However, the revolutionary ideas of liberty and equality began to challenge such entrenched norms, leading to gradual reforms in inheritance laws.

The late 18th century saw a surge in land speculation, driven by the promise of new opportunities in the vast western territories. Wealthy individuals and companies acquired large swaths of land with the intent of selling them to settlers and investors at a profit. This speculative fervor was fueled by the belief that westward expansion would continue unabated, opening new frontiers for agriculture, trade, and settlement.

Land speculation, however, was fraught with risks and controversies much as it remains today. Conflicts with Native American tribes, who rightfully resisted the encroachment on their ancestral lands, were a constant threat. Additionally, disputes over land claims and titles were common, as overlapping grants and fraudulent transactions complicated the already murky legal landscape. 

While rural land dominated the real estate market, urban properties in burgeoning colonial cities like Boston, New York, and Philadelphia also held significant value. These cities were centers of commerce, trade, and political activity, with thriving ports and markets. Real estate in urban areas included residential houses, commercial buildings, warehouses, and wharves.

The design and architecture of colonial urban real estate reflected both practical needs and social aspirations. Wealthy merchants and professionals built grand townhouses, often in the Georgian style, while more modest homes and tenements housed artisans, laborers, and the urban poor. The value of urban properties was closely tied to their location, with prime spots near markets, docks, and government buildings commanding higher prices. (Sound familiar?)

The Revolutionary War marked a pivotal point in American history and had profound implications for real estate. The war disrupted traditional land ownership patterns, as loyalists who sided with the British Crown often had their properties confiscated and redistributed. This period also saw the rise of the new concept of individual rights, which influenced land policies.

In the aftermath, the new nation faced the challenge of creating a fair and equitable system of land distribution. The Northwest Ordinance of 1787, for instance, established a standardized system for surveying and selling western lands, promoting orderly settlement and expansion. 

As the United States embarked on its journey toward independence and nationhood, the evolving concepts of property rights and land distribution would continue to shape its development for years to come. Generational wealth for the masses, however, still has a long way to go.

Valerie M. Blake is a licensed Associate Broker in D.C., Maryland, and Virginia with RLAH Real Estate / @properties. Call or text her at 202-246-8602, email her via DCHomeQuest.com, or follow her on Facebook at TheRealst8ofAffairs.

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