Saturday, June 29, 2013

Estate Planning : Does it Avoid Probate to Have Accounts in Joint Tenancy With Right of Survivorship?

Bank accounts or property in joint tenancy or with right of survivorship avoid probate but also bypass specifications in the will. Learn ways some avoid probate in joint tenancy from an estate planning and probate lawyer in this free video on estate law.

Friday, June 28, 2013

Estate Planning : What Is a Durable Power of Attorney?

Durable power of attorney allows the power of attorney to manage funds even in the event of incapacitation. Find out what durable power of attorney is from an estate planning and probate lawyer in this free video on estate law.

Thursday, June 27, 2013

Estate Planning : Do You Always Have to Probate a Will?

If the deceased has assets with deeds, a will most likely will not avoid probate. Strengthen your understanding of probate court with an estate planning and probate lawyer in this free video on estate law.

Wednesday, June 26, 2013

Estate Planning : Advantages of a Living Trust

A living trust has many advantages in the estate planning arena, like potentially avoiding probate. Learn the advantages of a living trust from an estate planning and probate lawyer in this free video on estate law.

Tuesday, June 25, 2013

Estate Planning : The Probate Process Explained

The probate process can be a headache when estates are not planned well. Uncover the probate process with an estate planning and probate lawyer in this free video on estate law.

Monday, June 24, 2013

Estate Planning : Difference Between Will & Living Trust

A living trust can help beneficiaries and families avoid probate more so than a will. Find out the difference between a will and a living trust from an estate planning and probate lawyer in this free video on estate law.

Sunday, June 23, 2013

Estate Planning : Estate Planning Tips

An important state planning tips is to have a court document, most likely a will, serves as a foundation piece for an estate plan. Learn estate planning tips from a registered financial consultant (RFC) in this free personal finance video.

Saturday, June 22, 2013

Estate Planning : When Does the Trust Stay Private?

Often revocable living trusts can help heirs avoid probate court, and affairs can remain private. Find out when a trust stays private from an estate planning and probate lawyer in this free video on estate law.

Friday, June 21, 2013

Legal Questions : How Does a Living Trust Work?

The idea of a living trust is that, while a person is still alive, they transfer their assets into a trust document that administers the assets. Avoid probate through a living trust with help from a certified civil mediator in this free video on law and legal questions.

Thursday, June 20, 2013

Estate Planning : What Does a Will Do?

When estates are planned correctly, a will helps an individual say where his or her money goes after death. Learn what wills do from an estate planning and probate lawyer in this free video on estate law.

Wednesday, June 19, 2013

Estate Planning : What Is a Revocable Living Trust?

Revocable living trusts are 98 percent of living trusts; they help avoid probate and allow others to use money to take care of the trust maker. Find out what an irrevocable living trust is from an estate planning and probate lawyer in this free video on estate law.

Tuesday, June 18, 2013

Planning to Protect Your Entire Family in Case of Medical Emergencies

Do you know who is legally authorized to make your critical health care and financial decisions if you are disabled and cannot do so? What about your loved ones? We have heard from people whose elderly parents have had strokes away from home as well as those whose children have been seriously injured while at college. In both situations, because they do not have the proper legal authorization, they were not able to speak to medical personnel on behalf of their parents and children. Without the right planning in place and readily available at all times, these already difficult situations can land you in a disastrous bureaucratic tangle when you and your loved ones can afford it least.

With important new medical privacy laws such as HIPAA (Health Insurance Portability & Accountability Act) becoming more and more strictly enforced by hospitals and medical facilities, making sure you have the proper authorization is more critical than you might think. Without the proper legal authorization your loved ones may not be able to assist you when you need it most. And if you don't have the proper written authorization to assist your loved ones, including your spouse, children, elderly parents and anyone else you may be responsible for, you may not be able to assist in their health and financial decisions when they need you.

Because of HIPAA, it is more critical than ever that you have current and effective health care proxies, HIPAA release forms and durable powers of attorney. Due to issues of law and interpretation, these critical documents should be updated on an annual basis to ensure effectiveness.

Most parents are not aware that medical professional's interpretation of HIPAA laws can prevent you from receiving information about your children's medical condition once they reach eighteen. Hospitals and Student Health Administrations at most colleges are notorious for strictly enforcing these regulations. Some hospitals have even refused to tell parents anything over the phone-including whether or not their college age child has been admitted to the hospital!

If your elderly parents are relying on you to help them make critical medical and financial decisions, make sure that you have current and correct legal authorization readily accessible or you may find yourself cut off from access when they need your help most. For that reason we help ensure our clients have 24/7 access to all of their health care documents.

Even if you have current, enforceable documents, that may not be enough. Do you know how your documents will be accessed if there is an emergency? If they are on a shelf in your home or locked in a vault at your attorney's office, they will not be there for you when you need them most. Make sure you are not shut out of important health care decisions by ensuring twenty-four hour, seven day a week access to your documents and emergency contact information as well as those of your children, parents, grandchildren and other loved ones.

Contact Dennis Sullivan and Associates or attend an upcoming workshop to make sure that your family is protected. Our legal, tax and asset protection experts can help you design a plan to meet your goals and protect those you care about. For more information and to attend an upcoming workshop, please see our website at
Dennis Sullivan & Associates
888 Worcester St.
Wellesley, MA 02482

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Monday, June 17, 2013

Setting Up an LLC: What You Need to Know

Many people think that starting a company is a complicated task. This is why many people are discouraged to start their own business. But with a limited liability company or LLC, starting a business is really easy. Procedures are also self-explanatory and a company can be set up even without hiring a lawyer.

What is a limited liability company?

A limited liability company is one of the business structures like a corporation, partnership or sole proprietorship. An LLC has the features of other business structures making it a better choice. It has the legal protection of owners' personal assets like corporations and it has simple processes and tax benefits like partnership or sole proprietorship. This makes setting up an LLC much simpler than corporations.

Setting up an LLC: Things needed in starting a company

As mentioned, setting up a limited liability company is very simple. There are no complicated procedures and documents just to start the business. In fact, there is only one document that is required by law in order for the company to start.

The first thing that you need to do if you want to set up an LLC is to choose a name. Like any other businesses, the name should not be similar to any limited liability companies and should not violate any trademark. There are also additional and specific rules in naming an LLC depending on the state where the business will be located.

In setting up an LLC, the name of the company should have designators such as Limited Liability Company, Limited Company or abbreviations such as LLC, L.L.C and Ltd. Liability Co. The name of the company should also not include certain words such as Bank, Insurance or city name (unless permitted by the state).

After choosing a name for the LLC, the next thing that you need to do is to file the Articles of Organization, the only document required by law. This is the document that has the basic information about the company such as business name and owners' names and addresses. A registered agent and corresponding address should also be indicated in this document for future lawsuit. This registered agent is the designated person to be contacted for legal proceedings.

Filing for Articles of Organization has a fee. Different states have different amount of filing fees but the usual amount is $100. There are states that charge as much as $800 just for filing the document.

Setting up an LLC does not require having an operating agreement but it is better if you have one. This document sets out rules for the company such as members' rights and responsibilities, percentage interest in the business, allocation of profits and losses, voting power of the members, management of the company, and "buy-sell" provision that sets out procedures in case a member dies or leaves the company. This document can help the company and its members face future legal proceedings.

Setting up an LLC: What happens next?

After submitting the Articles of Organization, the company can start its operations. But before opening the business, it should have the necessary licenses and permits to ensure that everything will go smoothly once the company opened its business to people.

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Sunday, June 16, 2013

What Is a Lasting Power of Attorney?

A Lasting Power of Attorney is a legal document, which allows a person to appoint someone they trust as an 'attorney' to make decisions on their behalf. These decisions can be about their welfare, their money or their property. Attorneys can make decisions for people when they no longer wish to do so, or when they lack the mental capacity to do so. A Lasting Power of Attorney cannot be used until it is registered with the Office of the Public Guardian.
Who decides what 'lacking mental capacity' means?
Someone can lack mental capacity if they have an injury, disorder or condition that affects the way their mind works. This could mean they have difficulty making decisions all of the time or that it might take them a long time to make a decision. The assessment of someone's mental capacity should only be made at the time a particular decision needs to be made.
Any assessment should start with the assumption that the person has the capacity to make the decision in question. It should never be based simply on their age or appearance, nor on an assumption about their condition or any aspect of their behaviour. A solicitor can decide if someone is capable of making decisions or understanding things such as a will or a Lasting Power of Attorney. If in doubt, they can get an opinion from a doctor or another appropriate professional. The Court of Protection has power to decide whether someone has mental capacity or not if there is a disagreement.
Determining who is capable of making a decision
The Mental Capacity Act Code of Practice, 2005, gives detailed guidance on how to assess someone's ability to make decisions, but generally the sort of things that should be taken into consideration when assessing the ability to make decisions are:
  • if the person understands what decision they need to make and why they need to make it
  • if the person understands what might happen if they do or do not make this decision
  • if the person can understand and weigh up the information relevant to this decision
  • if the person can communicate their decision (by talking, using sign language or any other means)
  • if the person can communicate with help from a professional (such as a speech and language therapist)
  • if there is a need for a more thorough assessment (perhaps by involving a doctor or other professional expert)
It's vitally important to make the distinction that just because a person makes a decision you don't agree with, doesn't mean they are therefore incapable of making a decision. If in any doubt about this matter, it is always best to consult a qualified solicitor for an informed opinion.
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Friday, June 14, 2013

Updating Your Will - There May Be More Reasons to Do So Than You Realize

Your Last Will and Testament is your only chance to decide what happens to your estate assets upon your death. It is the cornerstone of your estate plan -- the document from which all other estate planning tools flow. Once you have taken the time and effort to create your Will, don't make the mistake of failing to update it when necessary. Some reasons that a Will needs to be updated are obvious; however, consider the following, not so obvious, reasons as well when deciding if it's time to take another look at your Will.

Death: People think to update a Will when a parent, spouse or child dies, but the death of the person named as executor or guardian of your minor children can also prompt a review of your Will. The death of a business partner or even an in-law may also warrant a Will update.

Marriage or Divorce: Clearly, your own marriage or divorce calls for a revision of your Will; however, other marriages or divorces may also necessitate a change. The marriage or divorce of a parent, child or guardian, for example, can call for a review of your Will.

Birth: Although it is easy to rely on a generic term, such as "issue", to cover all of your children or grandchildren, it may be preferable to name each beneficiary by name in your Will to avoid any possible future confusion. As such, take the time to update your Will when there is a birth in the family.

Beneficiary Reaches the Age of Majority: Minors cannot inherit directly in your Will. As such, you likely named a trustee for any minor children when you made your Will. If a child has reached the age of majority, you will need to remove the trustee and provide for the direct transfer of those assets to the beneficiary in your Will.

Change in Assets: Although you may have a general provision in your Will for any asset not specifically named, if you acquire an asset worth a significant amount of money, or sell one, you may need to update your Will to address that asset for clarification.

Change in Location: In the confusion of a move, people typically don't think of how residency can affect a Will. State laws, however, can directly impact provisions in your Will, warranting a review and possible revision.

Change in State or Federal Laws: Laws change on a regular basis. Federal tax laws, for example, seem to continuously change. A significant change in either a state or federal law can result in the need to make a corresponding change to your Will.

You Reach the Age of Required Distributions: IRAs and 401(k)s typically require you to start taking distributions around the age of retirement. If you have significant funds in one of these accounts, the required distributions can change your asset structure enough to warrant a Will update.

Change in Guardian: This is a big, yet often forgotten, reason to update your Will. Regardless of the reason why you wish to change the named guardian for your minor children, if you wish to do so you must make it official by revising your Will.

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Thursday, June 13, 2013

Reasons For Keeping A Medical Power Of Attorney

Medical power of Attorney is also known as living will or advance health care directive which is only related to the decisions made for your medical care and health. You have to organize a medical directive according to your state's law authorizing that your partner should make the decisions on behalf of you in case of any illness or accident. Families of couples who are unmarried may raise their brows or may object on your decision to keep your partner as the medical power of Attorney. So you have to be very clear on that in the legal document, but then also there is no guarantee that the blood relations will not try to block your wish.

You should not keep the originals of your medical directive in the safe because when the legal documents are unavailable, wrong decisions might be taken on your treatment. Provide one copy of the HIPAA form, medical directives and other information related to your living will so that your agent can make right decisions. You must have the extra copies of your medical power of attorney as the doctors, hospitals or other persons who would like to know your decisions regarding the medical directives can go through it.

It is always wise to appoint an agent as your medical power of attorney, if you are in the later stage of your life. You agent can make decisions on behalf of you when you are not mentally strong to do so. You can select any individual you like as your agent or attorney-in-fact. Even though you have a living will, you should have a medical power of attorney as both are completely different from each other as legal documents. Living will shows the person's wish on the decision that should be made regarding the medical care, if there is a need of life support system whereas the medical directive is used to make important choices on medical care like using a life support system when the person is unable to make a decision.

This kind of power of attorney is not only used for older persons who are suffering from serious diseases, but also suited for young individuals who met with an accident or suffering from some serious health problems. The agent should perform the wishes mentioned in the document, even though the wishes made by you may contradict with your agent's wish. The agent should follow your instructions, even though they wish you to be alive disregarding your health condition. You should discuss your wishes with your agent so that you can assure that everything will go smoothly according to your wish when you are mentally incapable of executing those wishes. When you become mentally incapable, the agent will get the responsibility to act on behalf of you including the handling of all your money.

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Wednesday, June 12, 2013

Grasping the Concept of a Conservatorship

As people begin to age, practical issues begin to rear their head that nobody really contemplated before hand. Specifically, the ability of the senior to make financial or health decisions can become questionable and a conservatorship might be needed.

There is little doubt that we begin to slow down as we age. This is true for both our physical and mental capabilities. This is never more so the case then when people start to get into their sixties and older. The memory starts to go. The mind starts to slow down. If things start to degrade quickly, the issue of whether a senior has the capacity to make decisions for themselves can lead to a conservatorship hearing.

What is a conservatorship? It is the appointment of a third person to handle decisions for the individual in question. The decisions can be related to medical care, financial issues or both. The conservatorship is created by a judge during a court hearing. The conservator is often a family member, but the court can select a third party trustee or separate individual to handle the issues surrounding the impacted person.

So, what does the conservator actually do? For health decisions, the conservator is the person authorized to give informed consent to medical procedures such as surgeries. For financial decisions, the conservator takes over the person's bank account, investment accounts and so on.

The conservator is not given free reign over the life of the individual being evaluated by the court. Instead, the conservator has a duty to make decisions in a manner that reflects the best interests of the person in question. The specific ramifications of how this plays out is determined state by state as conservatorship law is controlled at the state level and each has a slightly different way of going about it.

So, what keeps the conservator from "playing funny" with the money and such? The court will assign a second person, usually an attorney, to oversee the decisions being made by the conservator. If the conservator starts taking action that looks contrary to the best interests of the individual in question, the overseeing party can alert the court.

There is no secret we have a bulge in our population known as the baby boomers. As that bulge moves into their senior years, conservatorships will become more and more common. If you have a senior adult in your life, make sure you understand the basic concept and what you might be required to get into.

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Tuesday, June 11, 2013

Ways to Make Probate Easier on Loved Ones

Probate pertains to a legal process which is necessary for authenticating and reconciling decedents' estates. In the U.S. there are two types of estate settlement proceedings. Testate is the process used when decedents' execute a last Will which is presented to the court upon death. Intestate is used when a person dies without leaving a Will.

Neither form of probate is enjoyable, but the process can be less difficult by participating in estate planning. The types of strategies needed depend upon personal circumstances. At bare minimum, every adult should prepare a last will and testament, durable power of attorney, and healthcare proxy.

Wills provide essential details about estate assets. They are also needed to designate an estate agent to take care of settlement proceedings, as well as set up legal guardianship for minors.

Power of attorney forms are needed to authorize a personal agent to perform tasks on your behalf. POA can be used for many reasons, but the most common are to manage personal finances or run business operations.

In essence, any act that requires photo identification and signature probably needs a power of attorney to give permission to another. This could include signing checks, using credit cards, buying or selling titled property, or entering into business contracts.

Healthcare proxy is very important as it provides directives regarding medical care if a person is unable to speak for their self. Also known as medical power of attorney, this document authorizes an agent to make decisions when a person is declared incompetent by a physician.

Not every estate has to endure the probate process. When estates qualify for state exemptions they can avoid the lengthy process as long as a valid Will is recorded through the court. Exemptions are provided when the estate's gross value meets state guidelines. Although these amounts vary by state, it is usually under $50,000.

One of the best ways to entirely avoid probate is by setting up a trust. Essentially, people transfer ownership of property to the trust and assign a Trustee to oversee their estate. Most often, Trustees are the person who sets up the trust. A successor Trustee is named to reconcile the estate upon death.

There are many types of trusts which offer different types of protection. Nearly all can be customized to suit the needs of each individual. A few of the more well-known include family trusts, children's trust funds, and revocable trusts. It's advisable to consult with a lawyer to ensure the right kind of trust is setup and that it is properly funded.

Anyone who has gone through the probate process will likely tell you it takes a substantial amount of time and can become quite expensive. Avoiding probate isn't difficult, but does require people to be proactive in putting together a complete estate planning portfolio.

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Monday, June 10, 2013

Understanding How to Make Your Small Business an LLC

When a small business converts itself into a limited liability company (LLC), it will gain many legal and tax benefits. One of the most advantageous reasons for a small business to become an LLC is that it protects the owner's assets in the event that a lawsuit was to arise. Also, if a business was to go under and file bankruptcy, as a LLC, the owner's assets are once again protected. So, how do small business owners go about turning their companies into LLC's? Let's take a closer look.

Step 1: Choose a Business Name

More times than not, a small business can continue operating as an LLC with its original name; however, this does not always apply. Sometimes, there will already be a business operating as an LLC with the same name. In this case, a new business name will have to be chosen.

Step 2: Choose a Registered Agent

A registered agent accepts any official mail that is sent to an LLC business, including LLC documents. An LLC must partner with a registered agent, or it will not be in legal compliance with a wide range of laws. Some states will allow an LLC to be its own registered agent.

Step 3: Filing Paperwork

Once a name and registered agent have been established, it is now time to file the appropriate paperwork with the Secretary of State office. When filing this paperwork, there will be a fee involved, ranging from $100 to $800. Also with this fee, small business owners will have to submit a copy of the Articles of Organization. A copy of this document can be located online and printed for free. The purpose behind this document is that it tells the Secretary of State what a particular business' name will be, who will be working for it as well as the nature of the company.

Step #4: Create an Operating Agreement

Some states will require business owners to create an operating agreement, which states how workers will be paid and what their responsibilities will be.

Step #5: Publish the LLC

Some states require that new LLC's publish their openings in local newspapers. In addition, LLC owners may be required to submit an Affidavit of Publication form.

Step #6: Obtain Permits

All LLC's must obtain the appropriate type of business licensure, and some of them will need to obtain permits.

Step #7: Update Banking Accounts

LLC's must obtain an Employer Identification Number that is issued by the IRS. This number must be used to establish a business bank account. If a bank account is already in place, the number must be used to update the account information.

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Sunday, June 9, 2013

Reasons Why It Is Important to Assign Someone Power of Attorney

Establishing the extent of, and limitations to, the agent's power is essential to a successful relationship between the two parties. An agent can be anyone the principal trusts (who is typically 18 years old or older) to carry on the principal's important matters, which may include financial, personal tax, and real estate matters. The letter of attorney may identify alternative agents if the named agent dies, becomes legally disabled, resigns, or refuses to act on behalf of the principal. A letter of attorney sets the standard for the amount of authority that the agent will have. It should be very specific about what powers are being granted and what limitations are placed on these powers.

With a durable letter of attorney, the document typically states that the transfer of power is effective immediately or when the principal is unable to coherently make decisions on his/her own due to some disability or incapacity. If the durable letter of attorney is to become effective when the principal becomes disabled or incapacitated, the definition of "disability" and "incapacity" should be included in the power of attorney, along with a method of showing the existence of a disability or incapacity. This helps the agent and third parties know when the powers pass to the agent. This is important because some third parties may be cautious about recognizing the agent's power to act on behalf of the principal. A statutory power of attorney, simply tracks the language from the State's letter of attorney statute. To make a legally binding, it must comply with all state laws, and should be signed, dated and notarized by the principal.

Medical power of attorney assigns an agent to make health care decisions for the principal when a physician certifies in writing that the principal is no longer able to make these important decisions. For example, a person is unable to make health care decisions while in a severe coma. Despite the significant grant of power, an agent is obligated to follow the principal's instructions when making decisions on his/her behalf and the principal may revoke the authority granted to the Agent. Two witnesses must be present for the signing of the written medical power of attorney, and there are limitations on who may serve as witnesses.

The letter of attorney is a valuable tool that can provide the principal with the peace-of-mind that his/her affairs will be taken care of. If you would like to know more about durable, statutory and medical power of attorney, consult with a trusted legal professional.

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Saturday, June 8, 2013

LLC FAQs - What Is an LLC?

When in the process of creating a new company, the business organizers have several options to choose from. The decision will impact tax status, liability and how the profits are shared. Although the options depend on the type of business that is being formed, owners can choose from corporation, sole proprietorship, partnership or the relatively new limited liability company (LLC).

The LLC is a flexible option for organizing the owners of a company. The LLC partners are called associates. Individuals, partnerships or any other business entity can all be associates in an LLC. The main benefit for choosing this method is that all owners are protected from any losses that the LLC might incur. The company is an entity on its own. Associates are not personally responsible for taxes, and if it is sued, only the company itself will bear any responsibility from damages. The main benefit to forming an LLC for the associates is the ease in which it is possible to get the profits. The losses stay on the books of the company.

This form of a company has been on the law books for over 30 years. In 1977, it began in Wyoming, but adoption was slow until Florida followed suit in 1982. It was in the 1990's that forming a company as an LLC really took off and started becoming a popular option that took the place of the other business ownership formats. Since then, it has remained on of the most popular options when creating a new business.

The structure of an LLC is simple. There can be an infinite number of partners in the entity, or there can be just one. Although corporations require bylaws and annual meetings for shareholders, these are not required by an LLC. The only requirement is to record the formation of the company with the secretary of state and pay the proper filing fees.

Among the many benefits of forming an LLC, there are a few disadvantages to associates who choose to structure their company this way. Since each state has its own laws governing LLCs, your company will be treated differently state to state. The earnings of the members of an LLC are also subjected to a self employment tax. This is not the case for corporations where profits are passed on as distributions and are not taxed this way. The final disadvantage only applies in certain states. Some states will apply a tax to an LLC but not to a business formed as a partnership. In those states, it may make more financial sense to form a partnership instead of an LLC.

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Friday, June 7, 2013

Name Change - Changing Your Name The Legal Way

There are many reasons for one to change their name and these range from marriage, security, simple desire to change name or for religious purposes. Whichever it is, changing a name has to be done legally according to the laws of your state. It is considered a serious crime to change your name in an effort to evade debts. Since change of name is of legal importance it is therefore required that you get a court order before you can change your name.

Changing your name will affect a lot of things some of which you will have to change as well. For instance after changing your name you will be required to also change your bank account name, driver's license, passport, voter's registration, social security card, will, title deeds including any signed contracts that carry your old name. It is evident that changing your name may also present future problems that you may not be aware of. It is therefore advisable that you do a little bit of research before proceeding with the process so you don't get any surprises.

Name change laws vary from state to state. It is therefore important to know beforehand what is required by your state. For example some states in the US require all name changes to be registered with the Social Security Administration, Bureau of Consular Affairs, United States Postal Service and the Department of Motor vehicles within a stipulated deadline ranging from 10 - 60 days. Some states in the US only grant a name change when the petitioner has presented a sound reason for changing a name and the courts have found no ulterior or illegal motives associated with the request.

Marriage is another reason for one to change their name. After marriage a woman may change her surname legally and revert to her previous surname after a divorce. The condition of changing a name as a result of marriage is not only limited to women.

Some religions encourage changing of name as a symbol of repentance. In many US states this is considered as a good reason to change a name. So whatever your reason for changing a name is always check if it is acceptable in your state.

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Thursday, June 6, 2013

LLC Vs S Corp

If you're just starting a business or you're ready to take your business to the next level, you have a lot of decisions to make, and one of the most important decisions you'll face is how to structure your business for legal protection and taxation. For many small businesses, the two most popular types of business entities are the LLC and the Subchapter S Corporation, or S Corp. In the LLC vs S Corp debate, there are a lot of factors to consider when you're considering which is best for you and your business. Here are a few things to consider:

LLC vs S Corp

LLC Pros:

* An LLC is relatively easy to maintain. LLCs require fewer forms than S Corps and taxes only need to be filed once a year.

* Formal meetings are not required, which means there's also no need to keep minutes.

* Start-up costs are lower than those associated with an S Corp.

* LLC members are not bound by profit-sharing regulations -- they decide how profits (and losses) are distributed.

LLC Cons:

* If a member declared bankruptcy or dies, the LLC will be dissolved and you will have to reform your LLC.

* For tax purposes, owners are considered self-employed, which means they have to pay roughly 15% in self-employment taxes on the company's entire net income.
S Corp Pros:

* S Corps offer considerably greater tax savings than LLCs; rather than paying a self-employment tax, only the wages of the business' employees are subject to employment tax. The rest of the company's profits are paid out as a distribution, which is subject to a much lower tax. (However, when S Corp owners pay themselves low salaries in order to receive larger distributions, the IRS may reclassify the distribution as wages.)

* S Corps are considered as being independent of their owners, which means if an owner dies, retires or sells their shares, the S Corp will maintain its status.

S Corp Cons:

* S Corps require significantly more paperwork and recordkeeping than LLCs; regular meetings must be held, minutes must be kept and bylaws must be established.

* S Corps have a much more complicated taxing procedure, and many more tax forms are required. What's more, forms must be submitted throughout the year, not just on April 15.

* Not all states recognize S Corps, and the way an S Corp is treated can vary considerably among states, so spend time learning how an S Corp is treated in your state.

Your business is your livelihood, and if you don't have the right legal and tax structure, you could be leaving yourself open for considerable loss. Use this article as a jumping-off point and then seek the advice of a good attorney who can help you decide whether an LLC or S Corp is better for your business' needs.

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Wednesday, June 5, 2013

Top 10 Reasons You Need A Living Trust

Now, you might say: "I don't need a trust. I don't have a large estate. I don't need fancy planning. It's too expensive anyway. And complicated. So I just don't need a trust!" And so you ask: "Why would I want to have a trust?" I'm going to describe in a few simple words why you will benefit from a trust. First, let me explain what a trust is. A trust is a . . .

Tuesday, June 4, 2013

Probate Administration: How It Works

Probate administration is something that many people fail to fully grasp. This is compounded by the difficult times in which such administrative action is necessary, usually after a person has passed on and their last will and testament is acted upon. It is important to understand the basics of probate administration because families often find it difficult to come to agreement about money, property, or other inheritances after a loved one has passed away. The administrator is responsible for the smooth transfer of assets or pieces of the deceased person's estate to their beneficiaries. There are a few basics that are crucial to understanding the process and you don't have to be an attorney or probate administer to see the complexity of such a position.

The first basic tenet of probate administration is the fact that it costs money. This may seem like a simplistic statement, but many families are caught unaware of the potential costs of having their loved one's assets divided up in court. If at all possible, the hiring of a probate administrator is something that should be agreed upon before the deceased person passes away. This ensures that the deceased person's wishes are honored and the family is treated fairly and properly by the administrator. It is not uncommon for administrators to charge fees which can be later deduced from the value of the estate or assets. These costs are usually deducted before the assets are split between the family members and beneficiaries. The executor of the will, or the person who is officially tasked with carrying out the actions described in the will, will work closely with the administrator and the family to make sure the last wishes of the deceased are honored and respected. In many instances, if the estate owes money and has to go to probate court, the executor is required to provide a fidelity bond which acts as a sort of deposit against the possibility that the executor will abuse their power to distribute the deceased's assets.

Another important concept to keep in mind is that there is usually a strict time limitation for the beneficiaries to receive the assets or portions of the estate. Probate administration planning should be incorporated into he last will and testament of the deceased whenever possible. If one is not selected before the time of death, a petition can be filed by the family members that will help to resolve the administration issue and nominate one to take care of such duties. On a related note, real estate or personal taxes as well as lawsuits and settlements can also be levied during the first few weeks or months after a person passes on. These are also time-sensitive judgements or actions and will most often come out of the estate or assets before family even gets to divide them up.

Such an administrator also helps to notify creditors that the deceased person has passed and acts as a middleman of sorts for the family. The administrator will likely help the family notify these creditors and help them to publish or post legally-necessary notices. This allows each creditor to clear out any remaining accounts or settle them with the deceased's assets prior to the distribution to the named beneficiaries. This can be a long, complex process, especially if the person who passed away had lots of credit card debt or loans with banks and other creditors. Just like with taxes or lawsuits levied against the deceased, the beneficiaries are second in line to receive their loved one's assets and estate.

Each state handles probate differently and it is certainly worth your time to research and learn more about the details of the transfer of assets to beneficiaries after a loved one passes. The best way to be prepared and reduce the need for probate administration or even the potential for inter-family legal struggles is to have a conversation with your loved ones about such issues. Make sure their decisions are in writing and hold up to legal scrutiny. Once a person is gone, family members often scramble to be first in line for any benefits or inheritances. It is amazing that when money is on the line, the family's social dynamic can change almost overnight.

If a person passes on without a last will and testament, the spouse or next of kin is usually awarded the estate or assets associated with the estate. Again, these assets are handed over after the Federal and state governments make sure no back taxes or liens are owed and after creditors give their input according to the legal contracts entered by the now deceased. An excellent way to avoid all the probate headaches is to create a trust that allows for a probate-free transfer of money to the family of the loved one who has passed.

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Monday, June 3, 2013

Why Everyone Needs at Least a Living Trust

There is one thing we all share in common: our days on this planet will come to an end - probably by surprise. That is about as basic a 'common denominator' as you can possibly get. To protect our loved ones from having to endure years of court procedures and legal fees, the Revocable Living Trust ('RLT') is a widely-used way to avoid the two related court proceedings known as Probate and Conservatorship, and to pass our assets on to one's loved ones with favorable tax planning.
Conservatorship is court proceeding. It arises when someone cannot manage their financial affairs and it's time to have someone 'step in'. Maybe they've suffered a stroke or are in a coma or some other disabling condition. The court can appoint a 'Conservator' over the person or the estate or both. The conservator's job is to temporarily manage the financial affairs and property of the person they have been appointed for. This is often done by someone who's either a professional (a bank, a CPA, attorney, etc.) but sometimes it might be a family member who has the experience to warrant a court appointment. The conservator is given legal powers by the court that remain in place until the person recovers and is able to regain control over their financial affairs, or until death, whichever occurs first. Many times a person who has undergone a conservatorship proceeding may be placed in a residential treatment facility and the person who has been appointed as their conservator will manage their finances, bills, obligations, contracts, housing and other financial decisions on their behalf.
Probate is also a legal proceeding. When a person has died with no will the court supervises the estate, ordering property distributed according to the deceased person's instructions, or if there is no will, then according to local state law. An executor or personal representative is appointed by the court and he or she has the responsibility to report back to the court as matters are accomplished. Tax returns are prepared and filed. Bills are paid. Mortgages are satisfied. When the court is satisfied that all of the heirs have been identified, the bills, taxes and debts paid off, the remainder is distributed to the persons entitled under the Will. Dying without a will is dangerous. It can trigger distribution of assets that you do not control and may not have wanted.
With a Living Trust in place, you avoid both Probate and Conservatorship proceedings. That's because once you execute the trust and transfer ownership of your checking account, savings account, home and other property into the trust's ownership, the trust is in fact the 'owner' of the property. You of course are both the trustee (administrator) and the beneficiary during your lifetime. Under the trust, you decide who will take over as trustee afterward, and you alone decide who gets what and when. The successor trustees may be your most responsible child, a grandchild, a trusted fiend or relative or even a financial institution such as the trust department of a bank. With the Living Trust in place, you can simply bypass the need for either Probate or Conservatorship altogether.
If you are concerned about someone 'contesting' the trust, there is a way to avoid that problem. One way is to specifically disinherit someone by name so they can't later claim to a judge that you 'forgot them'. Another way is a way that I personally think is better. You leave that person a much smaller amount (say one dollar or five dollars) but no more, and you include a provision in the Living Trust that if any person contests your trust instructions, they are to be treated as if they died before you and are therefore entitled to nothing at all. This is an easy way to avoid having someone try to tie up your estate in litigation and at the same time penalize them completely if they choose to cause you any problems as to how you wanted to distribute your estate.
The Living Trust is a separate 'person' under the law and can own various kinds of property. Typically the kinds of assets that go in to a Living Trust include: your Personal Residence, Personal (not business) bank accounts, credit union accounts, certificates of deposit, brokerage or trading accounts, stock of subchapter 'S' corporations, personal furniture, tools and furnishings, and collections such as art, sculpture or other kinds of collections that may be of value. Basically, anything you want to avoid probate.
There are some good opportunities for tax planning with the Living Trust. Using your Unified Credit, as of 2006 you are able to pass up to $2,000,000 (per person) down to your children. That's the number for single people. Married persons can each pass the same thing, so for a couple that means up to $4,000,000.
The most common mistake made with a Living Trust is the failure to properly 'fund' it. That means actually changing the ownership of your personal residence, personal checking accounts, etc. over to the legal name of your Trust. Some will establish a Living Trust, sign the appropriate documents (including the Power of Attorney for Health Care, the Pour-Over Will, Directive on Artificial Life Support, etc.) but never actually change legal ownership of their assets into the Trust.
Funding the trust means that you will record a new deed on your home in the county where the property is located. You'll also visit your bank or credit union and sign new signature cards as the 'trustee' of your Living Trust. If the bank or credit union needs a copy of your trust, remember that it is a private legal arrangement. So instead of allowing them to copy all the private provisions, simply provide them with a photocopy of the 'Abstract' (sometimes called the 'Certification') which sets forth the powers of the trustee and indicates who established the trust, etc.
Your Living Trust can literally save your surviving family members thousands of dollars in legal costs, probate fees, conservatorship fees, and months and months of administrative time. With a Living Trust as the owner, assets may be transferred relatively quickly and with a minimum of involvement by outsiders who might otherwise disrupt your plans for the loved ones you wish to benefit.
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Sunday, June 2, 2013

7 Advantages of Living Wills

Although the word will is used as part of a living will, it really isn't a will at all. Basically living wills, also known as inter vivos trusts, advance directives or healthcare directives, are documents that express the preferences and desires regarding medical treatments of a person in case they are later unable to communicate their wishes due to permanent unconsciousness or an illness that is terminal. Often they help people who want to avoid artificial life support as well as other more advanced medical procedures to sustain life so they can have a natural death. Today they also include things like organ donation, artificial resuscitation, and tube feeding as well. When these wills are valid, health care professionals are bound to carry out the instructions in the living will.

These wills are not just a choice for the sick or the elderly. They are an important choice for anyone, since anyone can end up dealing with accidents or sudden illnesses. Not convinced that you need a living will? Well, here are a few of the advantages of having a living will that may change your mind.

Advantage #1 - Refuse Treatments You Don't Want - One of the main advantages of having a living will is that it allows you to refuse any treatments that you do not want. Perhaps you do not want artificial resuscitation or a feeding tube in certain cases. With your inter vivos trust you can specify the treatments that you do not want given to you. Some people feel that certain treatments are against their moral beliefs, and the living will gives them the opportunity to make sure they are not given these treatments in a time where they cannot voice their opinion and dissent.

Advantage #2 - You Know the Outcome - Having a living will also is advantageous because it allows you to know the outcome before it happens. You never know what type of accident could happen or what type of disease could attack your body. However, when you have your document in place, you can know what the outcome will be if you have one of these problems and can no longer make your own medical decisions.

Advantage #3 - Prevent Arguments Among Family Members - A living will can also help to prevent arguments among family members if something unfortunate happens to you. No doubt you have family that cares about you, and all of them may have different ideas of the best treatments if you are ill and unable to make your own decisions. The last thing you want is your family arguing about your treatments. So, having your healthcare directives in place totally eliminates any arguments that could occur with your family members.

Advantage #4 - Make Decisions Easy for Your Family - Making a decision about a dying loved on or a permanently ill loved one can be so hard for the family. It can be a lot of pressure to make these kinds of decisions. However, when you have your living will done, your family will not have to make the decisions for you, which makes it so much easier for them.

Advantage #5 - Insure Doctors Follow Your Wishes - No doubt you want to be sure that your doctors follow your wishes in the end. With an advance directive, you can insure that your doctors do follow your wishes and that they don't just do what they feel is best for you. This allows you to be in control of the decisions made instead of the doctor.

Advantage #6 - Authorize Treatments You May Want Given - While a living will allows you to refuse treatments, it also can help you to authorize treatments that you may want given to you as well. There are many medical treatments that require authorization from the patient, and you may be in a position where you cannot do this; however, if you have the authorization in your will for certain treatments, it can insure you get the treatment you need.

Advantage #7 - Eliminate Financial Encumbrance for Your Family - Often people who end up with permanent illnesses end up needed long time care, which can be very expensive. Some people prefer not to leave this type of financial encumbrance on their family. With your living will, you can choose options that will eliminate financial encumbrance for your family so you don't have to worry about them searching for financial resources to help pay for your treatment and care.

So, I hope that explains what a living will is and why it is a good idea to have one.

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Saturday, June 1, 2013

Getting Started On Your QDRO

Filing a QDRO document is required if you are divorcing and have a retirement plan or account that needs to be divided. You can file a QDRO, or it can be filed by your former spouse. Either way, law counsel is always a good idea.

You may contemplate waiting to worry about your retirement account until you are a little closer to retirement. Experts however, warn against this as you may reduce the chances of being able to claim your money as more time goes by.

You can get started by gathering as much information on yourself, your former spouse, and your plan as possible. You will also need to have a copy of your divorce decree. You can then fill out the QDRO with the help of your legal counsel.

After you have completed your document and looked over it, you will need to send it to your spouse or former spouse and his or her lawyer for approval. Neither party needs to sign it before more approval is received from the plan administrator and the court systems.

Once your plan administrator has received the document, you may be requested to make changes before your document can be approved. Once the document is approved, you may then receive instructions on how to receive your award.

You might have the option to receive your reward all at once, but more likely, you will be awarded in monthly payments. You may also want to look into the possibility of rolling your payments into your own 401k, penalty free. Depending on the plan you have, the cooperativeness of your spouse, and other factors, you should be able to complete a QDRO process in two to six months.

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