Is the RV Industry Headed for a Slowdown?

There is a little known fact about the RV sector that the rest of America should pay heed to. The RV industry has long been an economic barometer of sorts, providing a leading indicator of the direction of the economy as a whole.   “R.V.’s have always preceded the rest of the economy in a downturn and in an upturn,” said Richard Curtin, an economist at the University of Michigan.  Many members of this industry are currently watching this trend as they see RV sales starting to level off.

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RV industry shipments aim to hit 539,900 through the end of 2018, in what would mark 9 straight years of growth.  This is a 7% increase over 2017 which tallied 504,600, and still less than the 550,000 forecasted for 2019.  Shipments year over year through Q1 saw a 13.4% lift.  These figures were provided by Frank Hugelmeyer, President of the RV Industry Association, to the association back in June.

Mr. Hugelmeyer has a lot to be optimistic about with the aging population, which tend to be the bread and butter of the RV industry, as well as outsized interest from the millennial age group, who are entering their generational period of extra discretionary income.  This all seems to align with the fact that since 2010, when the sector was emerging from the financial crisis, the RV industry has grown at an annual average of 12.6%.

Not everyone, however, shares Mr. Hugelmeyer’s glass half-full interpretation.  The city of Elkhart, Indiana, self-dubbed the “RV Capital of the World” is responsible for the production of more than 80 percent of Recreational vehicles sold in the U.S.  Many in the industry here are getting a different sense of the headwinds that propel this little corner of the economy.

While overall RV shipments were up for July, motor home shipments were down 6.5% in the same month.  Richard Curtin sees this as a “yellow light”.  Mr. Curtin acknowledges this could be a temporary condition such as excess inventory due to overproduction involving a nearly 10 year boom.  While not a significant cause for concern yet, there are other future looking indicators to be considered as opposed to historic sales.

Elkhart enjoys some of the lowest unemployment rates in the country, at just over 2%.  Despite this, recently some companies there have been cutting their production workers to four day work weeks instead of five to alleviate some of the excess inventory.

Others point not to the temporary labor glut, but the larger factors that could be contributing to these headwinds.  The RV industry, like many other manufacturing and farming communities are hit first and hardest by the impacts of the trade tariffs.  Cost of goods for many in the industry are seeing increases of up to 50%.  These costs ultimately pass through to the consumer, and many blame the rising prices for the levelling off in shipments.

Senator Joe Donelly, A Democrat whose home is near Elkhart says, “I think there’s serious concern about the effects of tariffs on the R.V. industry.  So many of the components that go into R.V.s are directly affected by these tariffs.  Echoing these sentiments is Mark Dobson, the head of the Economic Development Corporation in Elkhart County, “Nobody’s in a panic, they are just concerned.”

Still, where some fear a downturn, others are thriving.  LCI industries, a large manufacturer of components for RV’s are experiencing growth in growing sectors.  CEO Jason Lippert is optimistic.  His company saw aftermarket component sales rise by more than half in the second quarter, signaling a move to RV maintenance as opposed to new purchases.  Dan Holtz, a small business owner in the industry welcomes a perceived slowdown, as he has said he is having trouble finding enough workers and sees it as nothing more than an expected correction.

While no one in the industry has hit the brakes just yet, some are starting to take their foot off the accelerator.  While Mr. Curtin believes conditions metaphorically display a yellow light, he concludes that, “Depending on how things evolve in six months, it could be a red light, getting to the end of the expansion.”  Every business owner in the RV industry concerned about the slowdown being experienced within the sector should retain qualified counsel to represent their interests.

Thrift & McLemore’s attorneys have over 12 years’ experience in representing clients in the RV space.   Contact Thrift & McLemore by email at [email protected] or by phone at 678-671-4031 to discuss how we can assist you with protecting your RV business today.

Georgia Year’s Support: An Essential Component to Comprehensive Estate Planning

By Kent C. Bailey, Esq., Thrift & McLemore, LLC, September 2, 2018

The death of a loved one is a time of extreme mourning and anguish for surviving family members.  In addition to the grieving process many may worry how they will move forward financially, especially if the deceased was the breadwinner of the family.  While many families are familiar with the need for a will to add financial security in these times, an almost forgotten provision in Georgia Probate Code is often neglected as a tool to care for these loved ones: Year’s Support.

What is Year’s Support? 

Georgia Code Title 53, Chapter 3 – Year’s Support is, despite its name a permanent award to a surviving spouse, minor children, or both.  It is a right to inherit property for these individuals, regardless of what may have been communicated via will, the absence of a will, or the relative position of the majority of creditors.  The beneficiary is generally entitled to receive an amount equaling satisfactory support and maintenance for a period of 12 months for a standard of living that the individual is accustomed to.  This right is not absolute; for if a spouse remarries or dies before filing, or if a minor child reaches the age of majority before filing, this right is lost.  To successfully secure a year’s support claim, a petitioner must file in the probate court in the county of the deceased within two years.  This claim can be challenged by other beneficiaries of the will, and the award will ultimately depend on the court’s discretion.

In Laymen’s Terms

Year’s Support is in actuality an antiquated law that has been on the books in Georgia for decades, dating back to a time when males were the primary provider and females were the primary caregivers within households.  While it holds a dated application in modern society, it is nonetheless an active law that can be very effective for families depending on the situation.  In a nutshell, it is a way to ensure that families of deceased individuals are not left out in the cold due to the decedent’s neglect in creating an effective estate plan, or due to changes in the decedent’s financial situation since the creation of an estate plan.  A properly petitioned Year’s Support claim places spouses and minor children squarely in the front of the line when it comes to divvying up deceased individuals assets, ensuring the family is fed before most creditors or distant money hungry relatives.

Applying Year’s Support Strategically

By terms of a properly executed will in Georgia, an individual would most often have a surviving spouse elect between the right of seeking an award of Year’s Support, or taking the property under the will as it exists.  For decedents facing significant debt at the end of life or blended families, this offers significant flexibility with regards to the estate.

Year’s Support is especially beneficial for families of deceased individuals with high levels of debt relative to assets.  Be it end of life care or some other reason, often times creditors can take the lion-share of an estate leaving surviving family members to fend for themselves.  A Year’s Support election pushes these family members to the front of the line at the expense of said creditors.  This does not include mortgage debt, but does extinguish personal debt such as credit cards, student loans, etc.

Blended families are another area where Year’s Support enjoys high participation.  If a decedent does a poor job of leaving assets to minor children in the event of remarriage, or leaves the very home that a second spouse lives in to his minor children, Year’s Support offers recourse for the aggrieved parties.  While many blended families are able to get along cordially, Year’s Support can be the last bastion of support for others engaged in a nasty probate battle.

Once properly filed, courts generally condone the award of Year’s Support unless an objection is filed by a separate party with an interest in the estate.  If an objection is filed, it is necessary to retain an attorney, as proper accounting of the estate and procedural actions apply.  The likelihood of a successful challenge depends on a number of factors, and is an intensely fact specific inquiry.

Also worth mentioning is that an award of Year’s Support only applies to probate assets.  This means that retirement accounts such as 401k’s, IRA’s, and life insurance policies are exempt unless there is no designated beneficiary.  Similarly, accounts designated as Joint Tenants with Right of Survivorship (JTWRS) become sole property of the surviving individual upon death of the decedent, exempting themselves from reach of probate.

How Can We Help?

Before electing or petitioning for Year’s Support in Georgia, it is worth reviewing the complete fact set with a skilled attorney.  For a self- help guide on Year’s Support in Georgia, click here.  If you have any questions about Year’s Support, or any other aspect of Estate Planning in Georgia, the qualified attorney’s at Thrift & McLemore are here to help.  You can reach Thrift & McLemore by email at [email protected] or by phone at 678-671-4031 to discuss how we can assist you in creating an estate plan that works for you today.

Please visit us on the web at www.thriftlegal.com.

Thrift & McLemore Careers – We Are Hiring!

Thrift & McLemore (www.thriftlegal.com) is looking for an associate attorney, licensed and in good standing in the State of Georgia, to handle legal tasks related to real estate closings, real estate leasing work, wills, basic trust work, basic HOA work, car dealerships, RV dealerships, lemon law complaints, commercial collections, consumer timeshare disputes, basic litigation tasks (including court appearances), business start-ups, business formations and more. Would also like the individual to assist with drafting marketing articles, adding to blogs, social media marketing, etc.

Strong desire to train and mentor new associate for long-term relationship.

Work from home unless meeting a client or making a court appearance.

Thrift & McLemore
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Atlanta, GA 30363
Office: 678.671.4031

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Legal Entity Establishment: Choosing the Right Legal Form for Your Georgia Startup

By Kent Bailey, Esq. – [email protected]

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Choosing the proper legal form is one of the single most important decisions in the infancy of an Entrepreneur’s startup endeavors.  It will guide how decisions regarding the operation of business will be made, the exposure to liability of select members, and rules regarding taxation.  It is fair to assume that most, if not all, entrepreneurs have a sound foundation in the principles of business.  A large stumbling block for many of these same entrepreneurs is wading through the complexities of choosing the correct legal entity for their Georgia business.

Choosing the correct business formation depends on a variety of factors that are case specific to each small business owner’s individual situation and objectives.  Each entity carries with it its own pro’s and con’s that must be carefully weighed against the would be business owner’s needs, with an eye for optimizing success of the organization.  What follows are the most common entities and some information regarding each of them.

Sole Proprietorship

A Sole Proprietorship is the easiest type of business to form.  The business usually operates in the name of the owner.  There is no formal filing with the state to create this legal entity, and a business and or occupational license is all that is required to begin.  While this is the easiest business form to create, it also carries one of the largest drawbacks.  Personal and business activities are not distinguished in a Sole Proprietorship, meaning that all income from the business passes through to the owner or sole proprietor.  There is also no shield from liability, meaning that the business owner is personally liable to all debts of the business.

Partnership

Similar to a Sole Proprietorship, a partnership can be very simple to form, and is merely an agreement regarding a business relationship between two or more people who join to carry on a trade or business.  Where a Sole Proprietorship has a single owner and decision holder, a Partnership has at a minimum two members who are responsible for the carrying on of the business.  These partners contribute capital, labor, or skill to the organization and in return share in the profits and losses.  Generally speaking, a Partnership carries with it unlimited liability and pass through taxation, although some exceptions to this exist.  While a formal, written partnership agreement is not necessary to create a partnership in Georgia, it is strongly recommended.

C – Corporation

A C Corporation differs from a Sole Proprietorship or Partnership in that it is a unique legal entity that exists distinctly and separately from its owners.  It requires more steps to be properly formed, and must be registered with the Secretary of State in Georgia.  Ownership of a corporation is governed by shareholders of the entity who appoint a board of directors to oversee corporate decisions and policies.  This board of directors can elect officers of the company to manage day to day affairs.  In a start-up or small business, these officers are also typically the shareholders.  With the drawback of the C Corp. being the complexity of the organization, the benefit of this entity is the legal separation of assets and liability from the owner.  Income from the Corporation is taxed to the corporation then sent to the individual in the form of a distribution.  This is referred to as “double taxation” however the benefit of this formation is that the liability of the corporation does not extend to the personal assets of the owner.

S – Corporation

An S – Corporation is comprised of the same formation that exists for a C – Corp. above save for one difference.  S – Corp. Status is an election made to have the corporation’s income and expenses taxed to the owner’s via “pass through” discussed above.  It offers the same liability safe havens as a general corporation, but avoids the “double taxation” that exists within a C – Corp.  There are limitations as to who may qualify for organization under an S – Corp.

Limited Liability Company

A Limited Liability Company; or LLC is a hybrid entity that combines the limited liability characteristics of a corporation with the beneficial tax structure of a partnership.  While requiring more formality and steps to create than a Sole Proprietorship or Partnership, an LLC enjoys the same flexibility that these entities share with regards to pass through taxation and ease of ownership decision making.  LLC’s also enjoy the benefits of corporate formation with regards to limitation of liability, while avoiding the rigidity of double taxation, required shareholder meetings, complex decision making, or issuance and management of stock.  Limited Liability Companies are popular among small business owners in the state of Georgia.

For more resources on starting your Georgia business, reference the Secretary of States “First Start Business Guide”, at https://sos.ga.gov/admin/files/First_stop_business_guide.pdf.  If you wish to retain legal help in evaluating, starting, or managing your Georgia small business or start-up, contact Thrift & McLemore by email at [email protected] or by phone at 678-671-4031 to discuss how we can assist you in creating your Georgia business today.

Please visit us on the web at www.thriftlegal.com.

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