None of us like to think about our own mortality. Let’s face it – it’s not a pleasant subject to discuss around the dinner table. Yet the fact remains that one day, sooner or later, it will happen, and we need to be prepared. One of the ways to ease the pain and suffering of the loved ones we leave behind is to have an estate plan in place. Perhaps the most important part of that plan includes having a last will and testament.
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Bankruptcy – it’s a nasty word, and it’s something that we all hope that we’ll be able to avoid. Sometimes, however, that’s just not realistic. In today’s economy, it can be difficult to make ends meet. With jobs becoming scarce, mortgage rates on the rise, and increasing personal debt, it’s very easy to dig yourself into a hole… and fast.
There are numerous areas of law that are practiced worldwide. Some examples of these areas of law include administrative law, employment law, bankruptcy law, immigration law, martial law, and family law. Family law is a very important area of law that handles family related matters. These matters can be anything relating to marriage or divorce, child abuse, paternity testing, child custody, adoption, surrogacy, and emancipation.
Death and taxes, the only two sure things in life, as the saying goes. Whereas we still can’t avoid either one, we can, thankfully, take steps to prepare for them in the best possible way. Obviously, you have the most information about your affairs, so it’s best start ordering your affairs while you’re still able to do it yourself rather than leaving it to a spouse, child, or some other relative or executor who almost always will not know everything about your estate. Here are some simple tips from our estate planning attorneys in Springfield, MO to get you started:
I received a question via my website last week concerning a person going into business for himself and whether he needs to set up a Limited Liability Company (LLC). A Limited Liability Company (LLC) is a form of incorporation that is extremely versatile while maintaining all of the benefits of forming a traditional corporation. LLCs are much easier to form and get set up than traditional companies. You don’t have to file an annual registration report with the Secretary of State and you get to decide how you want to have the LLC taxed. It can be taxed as a partnership if there are two or more Members (Owners of the LLC). The LLC can also choose to be taxed as a ‘C’ Corporation or as an ‘S’ Corporation. One of the most powerful benefits is that if the LLC only has one Member (owner of the LLC) it can choose to be a ‘disregarded entity’. This means that for tax purposes only the LLC doesn’t exist. Perfect for a small business with few, if any, employees.
The main benefit of forming any type of corporate entity is limiting your personal liability. This means that if the company generates a liability, the corporate entity traps the liability within itself so that creditors cannot touch the assets of the Owner. Take, for example, a rental house. If the rental house is owned by Mr. and Mrs. Smith and someone gets injured on the property, it is possible, and likely, that Mr. and Mrs. Smith would be sued personally and their home, car and bank accounts could be at risk. In the alternative, if they had formed an LLC and someone had been injured on the property, a properly formed and operated LLC would protect their personal assets and limit the liability to only the property inside the LLC.
There are a couple of things to look out for when you are going to set up an LLC. A lot of non-attorneys are setting these up for people. They go online and file Articles of Organization for the individual, charge them a little bit of money, and send them on their way. The Articles are only the first step in properly setting up an LLC. The “guts” of the company is its Operating Agreement. In my opinion, an LLC without an Operating Agreement is worth less than the cost of the paper the Articles are printed on. If the LLC was ever sued, the first thing a Judge would look at to see if the LLC was properly formed and operated would be to review the Operating Agreement. I recently had a client that told me his banker set up an LLC for him. This was a national bank with multiple locations in most cities. The customer service representative filed the Articles of Organization for him, opened the LLC’s bank account, and sent him on his way. He left thinking that he was completely protected. Might have saved him a buck up front, but could have cost him his and his family’s home.
One last thing I tell all of my clients. Having an LLC is great, but your first line of defense is insurance. Talk to your agent. Make sure he completely understands your business and informs you of what potential risks you have. You want to make sure that if sued, any potential plaintiff’s attorney looks at your LLC, combined with your insurance, and sees that it is cheaper, easier and more effective to take the insurance check and run versus trying to come after your personal assets.
Please feel free to contact me if you have any questions about LLCs and how they can protect you and your family.
Summer is finally here and, like most people, I am getting ready to head out of town on vacation. (more…)
Durable Power of Attorney for Finance and Durable Power of Attorney for Health Care/Health Care Directive are two of the most important documents that everyone needs to have.
A Durable Power oí Attorney for Finance allows you to name someone to make financial decisions on your behalf. It is ‘durable’ which means that the power stays in effect even if you become incapacitated. One thing that most people do not realize is that the Power of Attorney loses power once the person granting it passes away. The Power of Attorney only works during the grantor’s lifetime.
A Durable Power of Attorney for Health Care allows you to name someone to make health care decisions for you in case you become incapacitated. This Power of Attorney only takes effect once you become incapacitated. It lets you choose the person(s) to make health care decisions for you to ensure your wishes are granted concerning your health care needs. A Health Care Directive goes along with a Power of Attorney for Health Care. The Health Care Directive allows you to state your end-of-life options concerning health care, i.e. Do you want a respirator? Feeding and/or water tubes? To what extent do you want life support?
Without these documents in place, your loved ones would have to spend valuable time and money and petition the Probate Court to name someone as your Guardian and/or Conservator. A Guardian is someone named by the Probate Court to make health care decisions for someone who has been legally declared incapacitated. A Conservator is someone named by the Probate Court to make financial decisions for someone declared legally incapacitated. The process of petitioning the Probate Court for someone to be named as Guardian and Conservator is expensive and time consuming. In the event that you are in an emergency/crisis situation, the last thing you want to have your family worrying about are the hassles of a court appearance and how they will pay for the legal fees involved.
Powers of Attorney are inexpensive and do not take much time to have prepared. They are an integral part to any estate planning – even if they are the only documents involved.