Friday, July 3, 2015

What Is Probate Law and How Does It Affect You Today?


Have you made your will official yet? It is not pleasant to talk about, but death will inevitably take us all at some point in our lives. Having an officially recognized will ensures that your estate goes to the people that you want it to when you pass away. The simplest definition of probate is 'the official proving of a will'. The laws of probate can be overwhelming at times, especially when emotions are still raw. It does serve its purpose however as not having a will (in-estate) makes the procedures a lot trickier and the results which can take months may not be what stakeholders deem right.

When a will is filed with the courts, the process for probate varies from country to country, even city to city. However the basic process is someone close to the deceased approaches the courts to act as 'executor', once the executor is established the process starts by collecting all assets and getting a value for the total. Once debts have been paid, the remaining assets can be distributed as per the will before the probate process is formally closed.

The Executioner

The executioner is usually the closest person to the deceased (wife, daughter, father etc.) or a close friend.

Probate affects you today in two ways. As someone who files a will and as a person nominated to be the executioner of a will.

Writing Your Will

Writing a will may seem like a death wish, it is something no one wants to ever think about however there is an incentive. You likely have worked hard for what you have acquired in life and would like your estate to be distributed as you see fit according to your values and wishes. It is also to protect your family, pre nuptial agreements may appear to only be agreed to when a high profile celebrity gets married, or someone wealthy but they are doing it for the same reasons as a will. The subject of money makes people act in irrational ways to protect themselves. Family members may lay claim that they should get everything, while others believe it should be theirs. It is not a nice situation for all involved. By writing your will now, you ensure that these disagreements can be solved by simply reading your official legal will.

As The Executioner

As the writer of the will, you will normally want to tell the person who you are leaving in charge of your estate should tragedy strike. It isn't the easiest conversation to begin, but knowing you have someone you trust can put your mind at ease. When someone brings up the subject with you, there is no set way to react. Simply listening to their requests is best, do not try and influence them either way. If you are unsure of anything though, do ask. Documenting everything possible is the safest option as emotions may get in the way of what was truly requested. In a perfect world there will be many, many years to you put everything in place exactly the way you wish. Make it a common practice to revisit the will every couple of years, to verify that it fits how you feel at that time.

Probate is something most people will deal with from both sides as the executioner and the writer of the will in their lifetime. Having a will ready so that the probate law process can be handled appropriately by all parties is law that should be taken seriously.

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Thursday, July 2, 2015

Which Is Best, A Will Or A Living Trust?


You don't have to be wealthy to need a will in regards to your personal property. After you're gone, legal wrangling can become time consuming for family members left behind and often creates indecision and fighting amongst potential beneficiaries as your wishes may not be clear. A will is usually straightforward and simply put is a legal document that specifies how your property will be dispersed at the time of your death. It can be revoked or amended at any point in your lifetime, and can be used to appoint a guardian for any children that are not yet of legal age.

Another option to be considered is a living trust. A living trust handles property management of all assets and all of these assets are transferred to the trust. Typically, you will act as your own trustee while specifying who will act as trustee upon your death. A living trust has the added benefit of avoiding probate after you die and preventing public disclosure of all your private financial matters. A living trust does have some drawbacks. It must be maintained and any new property acquired must be transferred to the trust or it will not be under the protection of the trust. A living trust is also more expensive to initiate and must be managed. Generally a living trust is recommended if your estate exceeds a specific dollar amount, you have minor children, you're willing to manage the trust, and if you want control of when your beneficiaries receive any assets.

A simple will might be a better option if there is informal probate available where you live. Informal probate is a greatly expedited form of probate and is generally available to those whose estate is under a certain dollar amount. If you are single without children, and you don't own a business, it probably isn't necessary to set up a living trust and a simple will is sufficient. Upon your death, the executor of your estate will submit your will along with a petition to the probate court. The petition requests that the will be accepted as legal and valid and request that the executor named in the will be legally appointed. Any heirs, beneficiaries, or creditors must be notified of the submission of the will and have a specific amount of time to challenge it or submit claims against the estate.

This process does not apply to living trusts, which is why many people opt for a living trust versus a will. Each person's situation is unique and should be evaluated by an attorney who is familiar with estate law. Talk to your family and determine who will handle your affairs after your death. With everyone understanding who will handle which aspects of the estate and what to expect, the loss of a family member is a less stressful one.

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Wednesday, July 1, 2015

Do I Need a Will?


You can't take it with you. Unless you plan on living forever, there will eventually be a need to divide your property amongst the relatives and loved ones you leave behind. By having a will, you determine who gets what. Without one, the law will do it for you by the operation of statutes. Many people believe that they are not wealthy enough to need a Will. But if you own property that is titled (a car or house), after your death, those items cannot be transferred without opening an estate. If you don't have a Will, the cost of processing your estate goes up significantly.

When a person dies and leaves property behind, that property is known as an estate. In order to transfer ownership of the property in the estate from the deceased to surviving heirs, the estate must go through the probate process. A Will not only identifies who will inherit the property, but names an executor to administer the estate. Without a Will, not only will statutes determine who gets your property, but the court will have to appoint and administrator to handle the estate. This is a costly process.

The most obvious benefit to having a Will is controlling what property passes to which heir. This is important if there are pieces of personal property that you want to go to a specific loved one for sentimental or other reasons. A Will also allows you to place conditions on the bequest, such as that the heir complete higher education or attain a certain age, before receiving his or her inheritance.

If these benefits of having a Will are not enough to convince you to take action, then consider those who you are leaving behind. A Will invariably makes the probate process smoother and easier for the survivors. In addition to controlling exactly where the property goes, a Will names the person or persons who will "execute" the estate, meaning the person who will gather the property and distribute it to the named heirs. This is often no small undertaking - it can involve selling stock, closing and consolidating bank accounts, liquidating assets, and more. In drafting a will, you should be sure to select an executor who has knowledge of the property in your estate and the competence and willingness to perform the job, all of which makes for a more efficient probate process. Without a Will, the court must appoint an administrator (obviously not of your choosing) to perform these tasks. Unfortunately, this is more costly and can lead to disagreements amongst family members.

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Tuesday, June 30, 2015

Estate Planning : What Is an Heir Apparent?



An heir apparent is the heir who is assumed to receive the deceased's property before the will is read. Find out what an heir apparent is from an estate planning and probate lawyer in this free video on estate law.

Sunday, June 28, 2015

Estate Planning : How are Trusts Taxed?



In estate law, trusts are taxed differently depending on whether they are revocable or irrevocable trusts. Learn how a trust is taxed from an estate planning and probate lawyer in this free video on estate law.

Saturday, June 27, 2015

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 25, 2015

Becoming Incorporated - The Pros and Cons Of Incorporation


So you currently have your own business and you're pondering over whether or not you should incorporate it, or carry on as a sole trader?

Before you make the incorporation decision, you need to consider all of the advantages and disadvantages that incorporating brings.

This article will set out to explain the benefits and downsides to incorporation, starting with the benefits ...

Benefits of Incorporation:

Personal Liability Protection

An incorporated company is a separate legal entity responsible for its own debts. Shareholders only have responsibility for servicing debts and liabilities up to the value of their equity in the Company.

Creditors of a corporation can only seek payment from the assets of the incorporated business and not from the personal assets of shareholders, directors and officers.

As a small business owner of a non incorporated company, your personal assets are at risk if your business fails to service it's debts.

Personal liability protection is therefore a major benefit of business incorporation.

However, owners forming new corporations with small amounts of invested capital may well be asked to provide personal guarantees that credit will be honoured to reduce the risk of the lender.

Also, owners of incorporated businesses are required to personally ensure that the company makes its required tax repayments.

Protection From Legal Action

As with personal liability protection from debts above, the personal assets of the company's owners is protected by the separate legal entity status in cases where the incorporated company faces legal action.

Note, incorporation does not protect a company's officers from liability and prosecution in cases where the company is found guilty of criminal negligence.

Tax Advantages

Some incorporated businesses can enjoy lower taxation rates following business incorporation compared with partnerships and sole traders. One way of achieving lower taxation is to minimise the salary paid to the owners to reduce higher rates of personal taxation, and draw income from the business in the form of dividends which are taxed at a lower rate.

Obviously professional advice from a qualified taxation expert should be sought in all instances as all personal circumstances are different.

Other taxation benefits of incorporation are that once incorporated, many additional items of expenditure become tax deductible. For example medical expenses, entertainment expenses, vehicle and travel costs, recreational facilities and pension costs all become tax deductible. This can be a significant cash benefit. In particular money placed in an approved pension plan is tax free as is the funds growth.

Raising New Capital

Once you've incorporated your business, the ability to issues shares simplifies the process of raising capital investment. It's also easier to get loans and other finance approved from financial lending institutions if you are an incorporated company.

Transferring Ownership

The existence of shares also simplifies the sale of your business in the future. Also should an owner or director die, the business can continue to operate indefinitely.

Business Credibility

Having the words Inc or Corp in your business name gives a positive perception of long term financial stability.

Disadvantages of Incorporation

Double Taxation

Once incorporated, earnings are subject to double taxation, whereby, company profits are taxed, and then the dividends paid to shareholders from the "net" profits are also taxed.

With a non-incorporated business, the income the owner receives from the business is only taxed once. Double taxation can be avoided if the corporation is registered as an "S-Corporation"

Statutory Compliance Costs

Compliance with legal and accounting requirements places a significant burden on companies in terms of staffing, cost and time. There are also fees associated with the initial company incorporation, and ongoing operations.

Loss of flexibility The separate legal entity status of incorporation also means that the company finances are separate from the individual's, therefore the individual cannot "borrow" money from the accounts of the corporation, and statutory requirements in general reduce the flexibility of what can and can't be done with the business and its finances.

The above are some of the key advantages and disadvantages that you as a business owner need to consider before you begin the process of incorporation. You should always seek legal advice as all cases are different.

Richard Taylor is an MBA and Company Director with a particular interest in small business start ups. Click on the following link to learn more about the benefits and disadvantages of business incorporation. http://www.incorporate-my-business.com
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Monday, June 22, 2015

What is Power of Attorney?


Power of Attorney is a legal document where one person authorizes another to act on his/her behalf. It allows that authorized person to manage business and/or financial affairs when one person is no longer able to do so. It may be required due to illness, overseas travel or mental incapacity.

Why is it important to organise a Power of Attorney? Should you be considered incompetent to deal with your finances - you need somebody else to be authorised to deal with your affairs. A Power of Attorney document allows you to choose the person, with defined authority and limits if desired, the power to protect, or re-arrange, your assets.

The person named in a Power of Attorney to act on your behalf is referred to as your "agent" or "attorney-in-fact." With a valid Power of Attorney, your agent can take any action permitted in the document. Often your agent must present the actual document to invoke the power.

If you do not have a Power of Attorney and become unable to manage your personal or business affairs, it may become necessary for a court to appoint one or more people to act on your behalf. Usually referred to as guardians, conservators, or committees. If a court proceeding is required then you may not have the ability to choose the person who will act for you.

By executing a Power of Attorney for Finances (also referred to as a Durable Power of Attorney for Finances) you can decide who you want to make decisions about your legal and financial matters. You can be very specific about what actions you are authorizing your partner (or agent) to make, including which accounts he/she has access to and the types of decisions he/she can make.

A Power of Attorney for Health Care allows decisions to be made specifically on what kind of treatment the person wants, based on their medical condition.

A Living Will in some ways duplicates the information in the Power of Attorney for Health Care. It is a separate document that lets your family members know what type of care you do or do not want to receive should you become terminally ill or comatosed. It can also cover situations in which a person may survive but is not capable of making their own medical decisions.

It can be a directive stating that there is to be no heroic measures to keep the person alive when there is no realistic prospect of any meaningful recovery.

An Enduring Power of Attorney is a legal document authorizing a named person or people to act on your behalf. Subject to certain conditions it continues in force until death.

Guardianship is a legal relationship whereby a probate court gives a person (the guardian) the power to make personal decisions for another (the ward). A family member or a friend can initiate the proceedings by filing a petition in the probate court where the person lives. A medical examination by a licensed doctor may be necessary to establish the person's condition. A court of law will then determine whether that person is unable to meet the essential requirements for his/her health and safety.

As long as you are alive you have the power to revoke the Power of Attorney. To do this you must contact your attorney-in-fact to advise that the Power of Attorney has been revoked.

You can also specify a date that the Power of Attorney will expire.

A Power of Attorney is also important for unmarried couples, who live together, when a partner becomes incapacitated and unable to make decisions. When this occurs the law usually assigns the incapacitated person's next of kin as the decision maker. With a Power of Attorney, unmarried couples can give their partners the power to make decisions.

Gay Redmile is the webmaster of several finance and investment sites. Having recently been named as Power of Attorney for her father - she realised how important it was for people to be aware of the implications of not having one in place. For further information and the latest news and articles visit her site at [http://www.powerofattorneyhome.com]
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Saturday, June 20, 2015

Annulment Versus Divorce



There are various ground upon which an annulment or a divorce could be granted by a court. The legal consequences could be very important, since an annulment basically erases a marriage, whereas a divorce simply terminates it.