Many families struggle with how to manage the finances, health care and other personal matters of adults who are unable to care for themselves. You may decide to pursue an adult guardianship if an adult is mentally or physically unable to make his or her own decisions and does not have a living will and power of attorney that provide a competent person to make those judgments.
It is a sad truth that death is an inevitable part of life. And,
even though many of us are reluctant to face this fact, it is no excuse
to fail to plan for your end-of-life healthcare, particularly if you are
past retirement age. Although it may be scary to think about your
end-of-life decisions, it can greatly improve the quality of life for
your family after you are gone, and will reduce the chance your passing
is a burden on your family. Advanced directives offer you the assurance
that your last wishes will be fulfilled. Here are four things to know
1. What is an Advanced Health Care Directive?
advanced directive is a generic term for a legal document that
describes to and instructs others about your medical care, in the event
you are unable to make your decisions known. A directive only becomes
effective under circumstances described in the document, but in general
allow you to do two things. The first is to appoint a health care agent
or power of attorney. This person will make decisions on your behalf.
Secondly, the directive will provide instructions about exactly what
forms of health care you want and do not want.
2. Why Are Advanced Directives Important?
to recent surveys, the majority of people would prefer to die in their
own homes. However, many terminally-ill patients meet the end of their
life while in the hospital, typically while receiving ineffective
treatments that they may or may not really want. Occasionally, this
confusion can cause conflict between the surviving members of the
family, leading to fights and arguments. Meanwhile, the dying person's
thoughts and wishes remain unexpressed. An advanced care directive
prevents all of this. From documenting the treatments you want, to
describing your wishes for your remains and personal effects, advanced
care planning is highly beneficial.
3. Creating an Advanced Care Directive
advanced care directive and living will does not have to be
complicated, however the content may be complex and should be considered
carefully. In general, it will consist of short, simple statements
about what types of treatments you would accept or deny, given
particular circumstances where you are unable to speak for yourself. It
is important to create this document with the help and guidance of your
family, legal, health, and financial professionals for maximum
4. Talking With Your Loved Ones About Your Choices
vital step in advanced care planning is to clearly communicate your
wishes to your loved ones and family about your decisions, and why you
are making them. For most of us, this conversation can seem like a
daunting task. You may be uncomfortable bringing up your own death with
your loved ones, or it may seem like poor timing to have that
conversation, but it is much better to have this conversation now,
before there's a problem, so that everyone can remain calm and relaxed.
A Limited Liability Company (LLC) is a very flexible form of
business structure that combines elements of the typical corporation and
partnership structures. By forming an LLC, you create a legal entity
that provides limited liability to its owners. Often, these are
incorrectly called a Limited Liability Corporation instead of Limited
Liability Company. It is truly a hybrid business entity that can contain
elements and/or characteristics of corporations, partnerships and even
sole proprietorships, depending on how many owners are involved in the
Limited Liability Company. An LLC, even though it is a business entity,
is actually a type of unincorporated business and is not a corporation.
The main characteristic that an LLC shares with a corporation is the
limited liability protection that they both offer. The main
characteristic that an LLC shares with a partnership is the pass-through
income taxation that they both offer. It is, however, much more
flexible than a corporation and is very well suited to single owner
You should understand that neither limited liability
companies nor corporations always protect owners from liability. The
legal system in the United States does allow a court system to pierce
the corporate veil of an LLC if some type of fraud or misrepresentation
is involved or in a situation where the owner uses the company as an
Flexibility and Default Rules
All LLC legal
statutes include a phrase similar to "unless otherwise provided for in
the operating agreement" and this allows for the flexibility the members
of an LLC have in deciding how their LLC will be governed. Some
statutes provide default rules for the governance of an LLC that are in
effect unless an operating agreement has been adopted.
the purposes of the Internal Revenue Service and Federal income tax
purposes, LLCs are treated by default as a pass-through entity. If the
limited liability company has only one member or owner, it is
automatically considered a "disregarded entity" for tax purposes and the
owner is allowed to report the income from the LLC on his or her own
personal tax return as a Schedule C. If the LLC has multiple owners, it
is treated as a partnership and must file IRS form 1065. Partners will
then receive a K-1 for their share of losses or income so they can
report it on their tax return.
LLCs also have the option of
electing to be taxed as a corporation, simply by filing IRS Form 8832. Then, they will be treated the same way as a regular C Corporation or
they can elect to be treated as an S-Corporation. If it is treated as a
C-Corporation, the entity's income is taxed before any dividends or
distributions are given to the members and then taxation of the
dividends or distributions will be taxed as income for the members. Some
analysts have recommended the LLC taxed as an S-Corp as the best
possible small business structure, because it combines the flexibility
and simplicity of the LLC with the self-employment tax savings of the
Here are the attributes of a limited liability company that are most widely viewed as advantages:
the box taxation. LLCs have the option of being taxed as a sole
proprietor, partnership, S-Corporation or C-Corporation, which provides a
great deal of flexibility.
•Limited Liability. The owners of an LLC, who are known as members,
are generally protected from some or all liability related to the acts
and debts of the LLC, depending on state laws where the LLC formation
•Administrative paperwork and record keeping is significantly simplified compared to a corporation.
•Pass-through taxation is automatic, unless the LLC elects to be taxed as a C-Corporation.
•Profits are taxed at the member's personal level, rather than at
the LLC level by simply using the default tax classification given by
•In most states, LLCs are generally treated as being a totally separate entity from the LLCs owners.
•LLC's can generally be set up with only one person being involved.
•An LLC can assign its membership interests, and the economic
benefits of those interests can then be separated and assigned, which
provides the economic benefit of distributing the profit and losses of
the company, like in a partnership, without actually transferring the
title to the interest.
•Except in cases where the LLC has adopted a corporate taxation
structure, the income from the LLC will generally remain in the hands of
•By adopting an operating agreement, members can generally establish
their own rules for governance and protective provisions for the
Here are the attributes of a limited liability company that are most widely viewed as disadvantages:
states do not have a statutory requirement for an LLC to have an
operating agreement, however, if you are a member of a multiple member
LLC, you may run into problems if you don't have an operating agreement,
since most states do not dictate the governance and protective
provision for the members of an LLC as they would with a regular
•If a member decides to sell his interest in a limited liability
company, and if the ownership of the LLC is vested in multiple members,
it is not as straight forward as with a corporation since the LLC cannot
issue and sell stock certificates.
•Some investors are more comfortable with investing in corporations,
due to the possibility of an eventual IPO. This can make it harder to
raise financial capital.
•Franchise taxes are levied on LLCs in many states. This tax is
essentially a fee the LLC pays the state for the benefit of providing
limited liability. This tax can be based on revenue, profits, the number
of owners, the amount of capital employed in the state, or some
combination of these.
•LLCs are considered to be taxable entities in the District of
Columbia, which eliminates the benefits associated with pass-through
•In some states, renewal or annual fees may be higher than corporations.
•Creditors have been known to require members of LLCs to personally
sign for and guarantee debts of the LLC, which obviously makes to owners
personally responsible for the debt.
•A Series LLC is a special and uncommon type of LLC. It allows a single LLC to segregate its assets into separate series.
•A Professional Limited Liability Company, also known as a PLLC,
P.L.L.C., or P.L., is a type of LLC that is specifically organized to
perform a professional service. This will usually involve professions
where the state requires a license to provide these same services, like a
doctor, chiropractor, lawyer, accountant, architect, or engineer. Some
states do not allow an LLC to participate in the practice of a licensed
Mark has served in various roles in corporate America over the last 25
years, most notably in charge of large organizations with over 1000
employees. During this time, he has also owned several small businesses
and has developed a keep awareness of how different the two worlds are
and the special challenges faced by entrepreneurs. Because of his
background, Mark is able to bring a unique perspective to new business
owners and his addition to our team has all of us excited. Look for his
posts to cover anything and everything related to business. He has also
said that he is looking forward to hearing questions and comments from
you, so please leave comments!
Are you operating your business as a real business or as a hobby? It's
time to make your business OFFICIAL before the summer push for business! Let me ask you two important questions:
Are you operating your
business under your own name, a DBA or fictitious firm name, basically
as a sole proprietorship or maybe as a general partnership? AND/OR
Are you or your family
at risk because of business or personal assets that are unprotected
from unexpected losses or legal issues?
If you answered YES to either question please read on for important
news about why NOW is the time to form an corporation or LLC for your
Make it Official. Operating
as a sole proprietorship or general partnership sends a message that
you are still "testing" your business, or that you're not sure you'll
really make it. Perhaps your accountant told you that incorporating is
an unnecessary expense or that it won't help you save on taxes due to an
expectation of low profits. This is the WORST marketing message you can
send when you want to attract new clients and partners to your
business, who want assurance that you're about your business and here to
The Law of Attraction. You
get what you focus on. Testing, hoping and "seeing if things work out
or not" BEFORE you decide to step-up and make your business official by
incorporating broadcasts a clear message to the universe that you're not
really serious about your business or committed to a positive outcome.
The Law of Attraction states that the universe returns not what you wish
for, but what you program into your deepest belief system through your
dominant thoughts, actions and feelings. Making your business official
and really stepping up says, "I am ready to receive!".
Limited Personal Liability. You
may be thinking "I already lost everything in the market collapse from
2008" and still recovering. If you're one of the few that managed to
survive and grow your assets since then, but are still holding them in
your own name, you're playing a VERY RISKY game (similar to those with
assets in unstable European banks). Even if you don't have any assets
right now, a lawsuit or judgment will destroy any credit you are looking
to build in the future PLUS you may be looking over your shoulder for
years waiting for someone to come after you when you finally do start to
turn things around. That's no way to live your life. One lawsuit from
an unprotected business can ruin your chances of getting a personal auto
loan or refinancing your home. Good people who "play by the rules" can
still be sued for the most unexpected reasons. You may be thinking "my
business insurance will help me out" but are you really covered? Even if
your business is never sued, what if you're unable to pay a vendor and
they come after you? Do you want to be personally liable? Put a halt to
greedy people looking to take what you have worked for! This is the best
time to form an LLC or corporation to limit your personal liability.
Reduce Your Taxes. The
bottom line is that operating as a sole proprietorship will cost you
the most in employment taxes (up to 15.3% on earned income up to
$113,700 in 2013). That means that your income will be taxed as the
HIGHEST possible TAX RATE as a sole proprietorship. By the way, filing a
Schedule C (the form filed for earned income from a sole
proprietorship) also means that your business is among those MOST LIKELY
TO BE AUDITED. Why? The IRS has a $300 BILLION tax gap and they believe
the biggest tax cheats are the little business owner like you. Why?
Their stats show them that sole proprietorship are MOST likely to UNDER
report their income and OVER report their expenses (two big no-no's with
the IRS). Operating as an S corporation or LLC taxed as an S
corporation in many situations is a much better approach for two
reasons. You will have part of your profits as distributions which are
NOT subject to the 15.3% employment taxes AND move that profit to
schedule E, not schedule C which is more likely to be audited!
Access More Funding Options. Operating
as a sole proprietorship or general partnership limits you when it
comes to funding options. You are also DAMAGING YOUR PERSONAL CREDIT
SCORE by operating this way. How do you finance your business as a sole
proprietorship? You use your PERSONAL CREDIT cards which will drive up
your revolving debt which will in turn DRIVE DOWN your personal credit
score! When you form a corporation or an LLC you will SEPARATE your
PERSONAL and BUSINESS CREDIT. Yes, any type of cash funding with a
personal guarantee will come into play, but that DEBT does NOT show up
in the personal credit bureau which is HUGE for future funding! As you
form a new LLC or corporation NCP will help (if you choose) to build
your business credit scores quickly and get your business in a position
to secure funding to grow. But the first step is to form a separate
Simply Your Life. Yes,
in fact operating as a sole proprietorship will complicate your life,
not the opposite. Separating your business and personal life will make
it much easier for you to navigate both from a financial and legal point
of view. Now you will have each in its own compartment where it belongs
to protect your overall success.
Asset Protection. Forming
an LLC for your safe assets like investments (those outside a
retirement plan) will help you sleep better at night knowing you don't
have all your "eggs" in one basket. If you are using a LIVING TRUST to
protect your assets that will NOT work and everything in your trust may
be vulnerable. Do you own other businesses that really should be
operating through a separate bank account in a separate entity? Do you
own real estate in your own name that may be sending a message that you
are rich and have assets worth taking? Have you been in business for
years or are you operating more than one business in one entity? Are you
doing some business with a new partner and making the big mistake of
running that revenue through your current business? Avoid these costly
mistakes and form a separate company for that separate business.
Establishing power of attorney privileges is an essential element
of estate planning. POA authorizes another person to make decisions
related to finances and healthcare for someone else in the event they
are unable to make decisions on their own.
Before bestowing power
of attorney privileges it is crucial to understand how the process works
and the rights the person will be given. The person appointed to this
position ought to be capable of making difficult decisions that might go
against what other family members want.
Individuals who are
granted authority to make decisions must be at least 18 years of age.
It's important to choose a person who will remain true to decisions
pertaining to medical and financial transactions.
There are five
different types of power of attorney rights and responsibilities differ
based on powers authorized. Each consists of two individuals that
include the 'Principal' and 'Attorney-in-Fact.' The Principal is the
person that sets up the contract and the attorney-in-fact is the person
who carries out the duties on their behalf.
Durable Power of
Attorney is the most common type of contract. This legal document
authorizes the attorney-in-fact to make financial and medical decisions
based on directives provided by the Principal. Powers remain in effect
until the Principal dies or until powers are revoked.
most common document is the Non-Durable Power of Attorney which
authorizes the attorney-in-fact to make decisions for specific types of
transactions. Non-durable POA is generally used when the Principal must
undergo surgery or some type of medical treatment that might prevent
them from being able to make decisions. Powers are granted for a
specific transaction and expire once the transaction is completed.
Limited Power of Attorney is typically used to grant authorization to
the attorney-in-fact to sell or transfer real estate owned by the
Principal. This document revokes privileges when the transaction is
A Healthcare Power of Attorney is needed to authorize a
person to make medical decisions on behalf of the Principal It is
vital to discuss the types of medical procedures wanted or not wanted
with the person who will be in charge of making decisions to ensure they
will abide by your desires.
People often feel uncomfortable
discussing these topics, but it's best to openly talk about what kind of
treatments should be given or avoided if the unthinkable happens. If a
person is adamant about not being placed on life support if declared
brain dead, they need to make their decisions known in a healthcare POA.
Otherwise, medical personnel must abide by state laws and provide life
A Springing Power of Attorney is required to
authorize release of medical records and information. The
attorney-in-fact is required to obtain court authorization before they
can make decisions on behalf of the Principal.
The proper estate planning documents you need in case of
emergency! Nobody likes the thought of an emergency cutting a life
short. Especially for families, it's really hard to imagine what might
happen if there were some sort of tragic accident, an unforeseen
illness, or a catastrophic disaster that resulted in the casualty of a
vital family member. Without the necessary legal documents such as a
living will or power or attorney, the wellbeing of a family may be
threatened and your expressed or even written wishes may not necessarily
If someone is involved in a serious accident, but is
injured to the point they are unable to communicate their wishes, a
healthcare power of attorney is given the legitimate right to make major
healthcare decisions on the patient's behalf. For example, if you do
not wish to be placed on life support for an extended period of time,
the only way to make this preference legal is taking the proper steps to
create lawfully acceptable paperwork and documentation.
someone dies without any legally authorized instruction for the
delegation of their belongings and investments, all property goes into a
very complex court proceeding where assets are given to the spouse,
next of kin, or separated between various related parties. In this
situation, a third party has full control over how these items and funds
are distributed, regardless if the deceased had verbally expressed
other wishes. A legalized will is absolutely necessary to ensure that
your belongings are properly taken care of after your passing.
Have these legal documents prepared today so that you ensure that your family is taken care of in the event of an emergency.
Prepared Will is a legally enforceable declaration of how a person wishes his or her property to be distributed after death.
Health Care Power of Attorney
is a legal form that allows an individual to empower another with
decisions regarding his or her healthcare and medical treatment.
Living Will Directive is
a written statement detailing a person's desires regarding their
medical treatment in circumstances in which they are no longer able to
express informed consent.
I know the fees associated with the
creation of these documents can become incredibly expensive if prepared
by a private lawyer. I also know that people are looking to the web for
do it yourself forms which can turn into a nightmare if not done
correctly. In many states these documents if not done by an attorney can
be thrown out and not accepted by a court.
affordable solutions so that your documents are prepared by an attorney
and reviewed annually for you, your spouse, and covered family members.
it comes to protecting your family and your wishes, don't waste any
more time or put your loved ones at risk any longer.
A Healthcare Power of Attorney is meant to be in place to allow
you to make healthcare decisions for yourself when you are no longer
able to speak for yourself. You are considered to be legally
incapacitated when you can no longer speak for yourself. What happens
when you become incapacitated without having a healthcare power of
attorney in place?
If you become incapacitated or no longer able
to speak for yourself concerning medical decisions without a Healthcare
Power Of Attorney in place for yourself then family members in most
states might be able to step in to make decisions for you. This is put
into place by the power under the Adult Health Care Consent Act of most
states. The Adult Health Care Consent Act states an order of succession
of who will be able to step in to speak for you in case of your
incapacity. The Spouse is given priority in the order of those that can
step in and speak for you. The next in line is the children.
The next in
line is parents. After that are siblings. In the order of succession
after the spouse each group of children or parents if there is more than
one must come to an agreement on a decision to be made. This situation
puts an undue stress and difficult decision in the hands of family
members that have within their choice the power to keep alive or let a
family member die. This can lead to unnecessary fights or disagreements
among family members at a difficult and stressful time.
are differing opinions on whether you should be allowed to stay alive
or pass among family members the situation can quickly and literally
become life and death. Unnecessary stress and arguments can be prevented
by simply putting in writing your healthcare wishes in your advance
directives. Take the choice and doubt over what you would have wanted to
happen to you away from everyone else. This is a simple and selfless
act that could potentially keep a family together by having a plan in
place. Having a plan in place allows for everything to flow smoothly at a
time when tensions and grief can be high and get even higher.
is best to have a Healthcare Power Of Attorney in place to make your
wishes clear and appoint one agent to make decisions on your behalf.