Thursday, February 28, 2013

Why Advance Health Care Directives Are Important

Consider this scenario. You are in a hospital with a terminal illness, unconscious, connected to all kinds of medical machines, and has a very poor prognosis. Who will speak on your behalf during this time of illness? Who would tell the doctors, the nurses and your family members what your medical wishes are if ever you get into this terminal condition? Who would let your caregivers know what you would like to happen to you and your body in such a condition like this? Would you like to be kept alive by all means? Or would you rather decide not to be subjected to futile treatments knowing that this is not a dignified living for you? But how would you let everyone know all these wishes now that you are no longer capable of speaking up for yourself?
This is why Advance Health Care Directives (AHCD) are very important. As a clinical counselor working in a hospital for several years now, I have personally worked with families and witnessed them break apart because they could not agree in making medical and end-of-life decisions for the dying loved ones. Their loved ones, who were unable to speak up for themselves, did not have an advance directive. Remember the Terry Schiavo case?
I have witnessed many cases where, because patients did not have an AHCD, families and caregivers are plagued with guilt and have constantly asked themselves if they were making the "right" decision for their loved one or for themselves. Yet, I have also witnessed many cases where, because patients had an AHCD, their families and caregivers felt at peace, in spite of the pain, just because they knew they were honoring their loved one's medical wishes as reflected on their AHCD.
AHCD are legal documents that enable you to do the following:
1. Appoint or designate a primary and secondary power of attorneys for health care whom you trust to speak on your behalf and honor your medical wishes in an event that you could no longer speak up for yourself.
2. Appoint a primary physician whom you trust to be your doctor or caregiver.
3. Make your end-of-life wishes known.
4. Make your wishes known regarding organ donation.
5. Make your wishes known regarding pain control.
For an AHCD to be legal, it has to be signed by you (the person creating the document) before two witnesses. These witnesses could not be your designated power of attorneys or your immediate family members or your health caregivers where you receive medical care. Close friends or distant relatives could be witnesses. If you cannot find witnesses, the document could be notarized by a notary. The notary can only notarize an advance directive if you have a valid photo ID (e.g. driver license or passport). This process applies particularly in California. Other states may have different processes.
I would also like to mention that a Living Will is a kind of AHCD. Likewise, an AHCD could also be known as "Durable Power of Attorney for Health Care."
Once you created your AHCD, you keep the original and remember to keep it in an accessible place in your home. If possible, make several copies to give to your designated power of attorneys, your primary physician and to your hospital. I strongly encourage people to always bring a copy with them whenever they go to the hospital so that the hospital will not only have a copy of your document but also will know and honor your medical wishes. While creating an AHCD is not mandatory, it is a Federal Law that hospitals have to ask patients during their admission if they have an AHCD.
Most, if not all, hospitals have AHCD forms. You can always ask your hospital if they have available forms. You can also ask your doctor if he/she has a form. There are many websites now on the Internet that offer AHCD forms. Just do a search on "Advance Health Care Directives."
I believe that your completed (properly witnessed or notarized and signed) AHCD is legally recognized in states other then your own. However, since each state may have its own froms and probably laws on AHCD, the best thing to do is to always bring an extra copy with you when traveling.
Many folks think that an Advance Health Care Directive is only for patients who are terminally ill. Not so. Any competent adult, 18 years old and above, can fill out an AHCD. I remember dealing with the family of a 20 year old woman who ended up on a persistent vegetative state (PVS) as a result of a car accident. Her parents ended up divorcing just because they could not agree as to what to do with her in her grave condition. The mother believed that her daughter loved life so much that she would not like to be living in such a terrible medical condition where there is no dignity of life any longer. The father thought otherwise. This sad break-up of a family would have not happened if, even at early age, their daughter had an advance heatlh care directive.
I strongly encourage you to talk to your physician or family members about this difficult yet very important subject. I just hope that this article has been a source of help.

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Tuesday, February 26, 2013

Easily Misused Estate Planning Terms

Wills and Living Wills
Wills and Living Wills are key parts of any good estate plan. However, though the two sound similar they serve very different purposes. A Living Will states your choices for the kind of medical care you want to receive if you become sick or injured and are unable to talk. A Last Will and Testament, often referred to as just a Will, deals with your property and how you want it distributed if you should die. Therefore, a will is only effective after you die and a living will is only effective before you die and when you incapacitated.

Advance Directive vs Advanced Directive
A Living Will is a type of advance directive. All advance directives are documents a person creates that state what his or her choices are in the event he or she becomes incapacitated or otherwise unable to communicate with other people. Advance directives, such as Living Wills or health care powers of attorney, typically address financial or medical situations and can state specific choices as well as nominate someone else to make decisions on the incapacitated person's behalf.

These documents are referred to as "advance" directives because you make them in advance or in preparation for the possibility that you become incapacitated. Some people mistakenly use the term "advanced" directive, implying that the documents are somehow more complicated or important than others. This is not true, and anyone can make advance directives fairly easily as long as they ensure the documents comply with state law.

Probate Estate vs Trust Estate vs Taxable Estate
An estate is a general term used to describe an area or amount of property. It is sometimes used when referring to assets that are part of the probate estate at someone's death, or assets that are not payable to another person at the owner's death or not part of a trust estate. If an asset is part of a trust estate, then generally the asset will not be part of the probate estate. Further, when considering the taxable estate of an individual for estate tax purposes the IRS will consider the gross estate of the decedent to include the value at the time of his death of all property, real or personal, tangible or intangible, wherever situated. If property is part of a trust estate, it may or may not be part of the gross estate for federal estate tax purposes depending on certain facts about the trust.

Medicare vs Medicaid
Medicare is a federal program attached to Social Security. It is available to all U.S. citizens 65 years of age or older and it also covers people with certain disabilities. It is available regardless of income.

Medicaid is a joint federal and state program that helps low-income individuals and families pay for the costs associated with medical and long-term custodial care. Unlike Medicare, Medicaid has strict eligibility requirements.

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Monday, February 25, 2013

Frequently Asked Questions on LLC Formation

A limited liability company or LLC is technically a new concept in the business world. The United States has only acknowledged this in the late 1970s. So it is expected that many people do not know what an LLC is. Here are the common questions that people ask about the company and LLC formation.

What is a limited liability company?

A limited liability company is a hybrid business structure that features the protection of personal assets of a corporation and tax benefits of a partnership. In this way, the company enjoys a lot of benefits.

What are the requirements in LLC formation?

Only one document is required by law to form an LLC, although some states require other documents. The Articles of Organization is the basic document that states the company's information such as business name, address, names of members and their addresses, name and address of registered agent, and the life of the company. There is a filing fee for Articles of Organization and the fee depends on the state where the business will be established.

What is the business structure of an LLC?

During the LLC formation, the structure of the company will be determined by the owners. One feature of the limited liability company is the flexible management structure. It means that the number of owners (called members) is not limited. The company can have a sole owner, partners, or many members as long as their rights and responsibilities are clearly stated in their documents.
The members can also decide on how the company will be managed. The company can also be run by managers instead of members.

Who can be members?

This is a typical question in LLC formation since the company has flexible management structure. In most of the states, the members are the managers by default but the members can also be owners only and not managers especially if they are not knowledgeable on how the business should be managed.
Since there are no restrictions on ownership, members can be individuals, partnerships, corporations or even another LLC. But this should be verified with the LLC filing office if the state allows such ownership.

How are LLCs taxed?

The federal government classifies limited companies in order to determine how the company will be taxed. Since an LLC enjoys the tax benefits of partnerships, double taxation is prevented unlike in corporations. But there are times when the company files for an election for corporation during or after the LLC formation. In this way, the government will treat the company as a corporation just for the federal income tax purposes.

If the LLC is treated as a sole proprietorship or partnership, the taxation is passed-through. This means that the members of the company will declare the profits or losses of the company in their income tax return. In this way, the company is not taxed at a business level but as income of the owners.

What is a registered agent?

A registered agent should be determined during the LLC formation. This is the designated person to receive legal documents especially for the future lawsuit that involves the company. The name of the registered agent together with his or her address should be included in the Articles of Organization.

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Sunday, February 24, 2013

Probate - Understanding The Basics

Probate is a legal process that occurs after a person passes away. It involves the transfer of the assets of the deceased to the beneficiaries and creditors. If there is a will and it names an executor, the executor will be responsible for seeing that the terms are carried out throughout the probate process. The executor must identify and inventory the assets and also have them appraised. This process can take anywhere from a few months to a year. The executor may have to sell vehicles, land, securities, artwork or other property to pay any cash bequests - or pay off any debts left by the deceased. The executor could be a relative or an unrelated person. He or she could ask the lawyer who drew up the will for help with the legal necessities of probate. The cost of the lawyer will be paid directly by the estate of the deceased.

If the deceased did not leave a will, or if an executor is not named in the will, then the probate court will frequently assign the responsibility of handling the probate process to a relative; such as the spouse or child, or to the person who inherits the bulk of the assets of the deceased. This person is called the administrator. If a probate proceeding is not required, the court will not appoint an administrator. Instead, the family members and friends of the deceased will choose a person to serve as an informal administrator.

The probate process has several phases. The executor or administrator must prove the validity of the will and deliver it to the local probate court. The will can be validated with a written statement made under oath by the two witnesses to the creation of the will. The executor or administrator must also present the court with information on all of the property and debts of the deceased and the beneficiaries. Then creditors are informed of the death of the deceased. Creditors usually have six months from the notification of the probate to collect any money that is owed to them.

They must recover the money from the estate and not the heirs. The estate tries to settle these debts out of the available assets. If any assets are left, they are distributed to the beneficiaries. If all of the debts cannot be paid off, then the court decides how to use the available assets to pay off the debts. The heirs are not legally obligated to pay off any remaining debts of the estate. If the deceased did not leave a will, the state laws will decide how the available assets are distributed to relatives. The heirs and the beneficiaries are also notified about the probate proceeding. This is the time when objections to the will are usually made. The objections can be due to accusations that the will was drawn up while the deceased was mentally unstable, or that the will is a forgery.

There are situations where probate is not a necessary action. One situation is when the deceased leaves behind very few possessions which can be distributed to beneficiaries without any judiciary supervision. If there is any money account or property that is jointly owned, then the remaining co-owner will get the money account or property by default.

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Saturday, February 23, 2013

The Revocable Living Trust - Advantages and Disadvantages

Many people use trusts as estate planning tools, and an especially popular type of trust is the revocable living trust. It's an arrangement that you make, while you're alive, for the management and distribution of your property. This type of trust offers significant advantages, but it also has disadvantages, so it's not right for everyone. Here are some of the pros and cons:
AVOIDANCE OF PROBATE: Probate is the legal process under which your estate is administered when you die. It can be a slow and costly process. If you've transferred all of your property to your trustee before your death, all distributions of your property are handled through the trust, so there's no need for probate. This means that the distribution of your assets could potentially be much quicker and smoother.
AVOIDANCE OF GUARDIANSHIP: If you become incapacitated to the point that you can't take care of your own affairs, and you haven't planned ahead for this situation, your family will need to go through court proceedings to have a guardian appointed for you. If you have a revocable living trust that's properly funded, then your trustee already has the authority to manage your financial affairs for you, and you should be able to avoid having a guardian appointed.
PRIVACY: If you have a will that needs to be probated, that will is filed in court and becomes a matter of public record. This is not the case with a trust instrument. Under ordinary circumstances, a trust instrument will not need to be filed in court, so what you do with your property remains private.
EXPENSE: There's an initial cost involved in drawing up the trust document, and there are also costs involved in transferring property to the trustee in order to fund the trust. Once the trust is funded, the trustee actually starts performing his or her duties in administering the trust, and that means he or she is entitled to be paid for those services. You should weigh the cost of establishing and maintaining a trust against the benefit you'll get from the trust.
POTENTIAL INCONVENIENCE: Certain types of property, such as cars and Subchapter S stock, are more difficult to manage if they're held as trust properties. Also, there is additional bookkeeping involved in maintaining a trust. You should check with an estate planning attorney about what issues your particular situation might present.
NO PROTECTION FROM CREDITORS: Because you can change or end a Revocable Living Trust at any point during your lifetime, the assets in the trust are not protected from creditors. Once you die, the trust property does not go through probate. If you're worried about creditor claims, this can be a disadvantage. Under probate laws, creditors have deadlines for making claims against an estate. If they miss the deadline, they lose the right to collect on the debt forever.
The revocable living trust is not a one-size-fits-all estate planning solution. 

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Thursday, February 21, 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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Wednesday, February 20, 2013

Is a Divorce Quick If It Is Uncontested?

The type of divorce that one seeks may ultimately determine how long the process takes. This can be an ugly and frustrating time in a person's life, so getting the process over as quickly as possible is often of the utmost importance to individuals in the state. If it is uncontested, in which the couple is able to agree on all terms of the settlement without either party contesting them, is often the fastest path to take for couples looking to blow through the process as quickly as possible.

Even with this type of divorce, however, legal counsel is often encouraged to ensure that both parties' rights are protected. In some cases, just one party may hire an attorney who handles the case for the couple, but it is important to understand that the attorney is working only for the party that has hired their services. It doesn't make much sense for an attorney to represent both parties involved in a legal case, does it?

For all of its simplicity, however, the uncontested process must last at least six months from the time in which the Respondent, who is served with papers filed by the Petitioning party, is served. The six month waiting period is mandatory in the State of California for all divorces. This may be unpopular among couples who want to get the process over with and done in the quickest manner possible, but the sooner they accept the time-frame the better off they'll be.

During an uncontested divorce, the couple will agree to the terms of their settlement. This includes the division of their property and assets, any spousal support and other matters. If children are involved, the couple must also agree on child support, visitation rights of the non-custodial party as well as child custody. The couple may choose the type of legal custody (joint or sole) as well as the type of physical custody (joint or sole).

The minute that one party contests any of the items in the settlement, the process becomes of the contested variety. When the couple is unable to agree on all terms of the settlement and if even one item is holding up the process, it may last for much longer. Cases which are more complicated have been known to last for years before the process is finalized. That's why uncontested is the preferred method for many couples because yes it is the quickest way to get a divorce.

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Tuesday, February 19, 2013

The Will's Executor - Carrying Responsibility

If you have been named as an executor of a will, you may be wondering what your responsibilities are. An executor is typically named as such in the will or in another legal document, and is the person responsible for overseeing that the last wishes of the deceased are carried out. This is not an easy task, and it also includes making sure that all of the assets are disposed of properly, paying off the taxes out of the assets, visiting with family and friends who are named as inheritors, and generally taking care of all of the little details that a death necessitates.

If you were named as the wills executor, then this means that the deceased trusted your integrity enough to put the responsibility of their asset's dispersal in your hands. It is a heavy burden at times, but is also an honor. You may need to visit with an attorney to make sure that you follow the legal protocol properly, as things can be very confusing, particularly if there are many beneficiaries or if it was a large estate. You may also need to be prepared to meet with opposition from the inheritors as well, and so you may need additional legal advice.

Often, the will's executor will be responsible for sending the will to probate, which is where the courts will look over the documentation and decide upon the dispersal of property. The executor must stay abreast of the probate, and may have to oversee the sale of property, pay real estate taxes, death taxes or any outstanding debt out of the deceased person's assets. Usually, these taxes will be paused until the assets have been sold and liquidated, and at that time, the debts and taxes are taken out of that sum. Only then can any money be transferred to inheritors.

If there is no will, but an executor has been named, this may make the job much more difficult, as the executor now has to try to guess what the deceased would have wanted. In addition, without a will, the executor has far fewer legal rights and may have more of a burden on their hands when it is time to disperse the assets and property. Even under the best of circumstances, the executor will have quite a task on their hands, but a will can make things much easier for everyone involved. Don't take chances - make a will.

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Monday, February 18, 2013

3 Positive Points of Starting an LLC

When you start a business you will have to sift through the variety of options that are available to you in terms of running a full scale operation. Even if you're the only person working within the framework of a company, you will still need to file paperwork with your state and city governments, and you will need to have a good plan of action. Sure, you could just go into business and wait for the penalties to pile up and then form a legitimate business, or you could look into the proper way to go about starting an LLC. The latter is far better in many people's views, and will definitely save you headaches later on. Consider the following positive points of starting an LLC.

Multiple Owners or One Owner - Whether you have a great deal of investors that want to be part owners or you are alone in the process you will find that an LLC allows you to run your company with a great deal of freedom. Not only that, you will be able to include others in a management or even ownership capacity later on as long as you have an operation document that will showcase your ideas moving forward.

Liability - The best part of starting an LLC is that you will not be liable for a great variety of issues that will come up. For instance, let's assume that you have a client that is hell bent on suing you, and so they sue the business that you own and you have to go to court. If you file your paperwork properly, and you lose the case, you will only be liable for the money that is held within your business, and nothing else! That means if you own a home, a boat, a car or just about anything that is not part of the business proper, you could stand to lose nothing on a personal level. This is a great thing because you can protect your assets and not worry about what some might do to try and get your money.

Taxes - Dealing with taxes can be quite easy because they flow into personal income taxes in many ways. You will find that you will have to deal with your taxes in a manner that is a bit more simple than starting a larger company or a different option in terms of business. While it's not a matter of not paying your fair share, it's really a matter of ease when tax time comes around.

The above 3 positive points when starting an LLC are just 3 items that many find to be great. There are a number of other integral points to consider and each one seems to make the formation of this type of company a bit better than others. Only you can decide what path your business takes, but when it comes to starting something away from the traditional route of 40 hour work weeks, this is definitely one of the more attractive options. You'll find that it's easier than others, and it can bring amazing profits in time.

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Sunday, February 17, 2013

What Type of Corporation Should You Decide On?

Picking out your company entity type is among the biggest decisions you'll ever make pertaining to your company. Normally it's better to choose at least some kind of corporation for the liability protections incorporation conveys. Believe it or not, the Donald Trump University book, Asset Protection, mentions that one shouldn't so much as let a child set up a lemonade stand as a sole proprietorship or general partnership considering that those entity forms supply no liability protection at all.

The moment you've established that the business needs to become a corporation there are actually three details you really should be considering. Your business entity type impacts all three of these issues. The very first issue is tax liability. Your legal entity will determine how your income taxes is going to be reported, the tax rate or credits that you enjoy, as well as who or what will ultimately be accountable for those income taxes. A number of corporate entity types, for example the LLC, make little distinction regarding the owner's individual taxes and the company tax return, in contrast a regular C-Corp files its own taxes and each of its investors, staff, as well as officers likewise file their own personal taxes as usual.

The next issue is one involving legal obligation. This addresses any predicament in which your business may be targeted by any type of suit. The lawful entity signifies who is eventually in charge of paying any agreements or awards which come up from these kinds of lawsuits. Most corporate entity types are present to manufacture a legal shield for the owners, ensuring that the corporation, instead of the business owners or investors, absorbs the culpability. This means a judge might go after all of the banking accounts and also resources in the corporation's name to settle financial obligations, however they couldn't go after the individual accounts or assets of any connected owners or shareholders. Having said that, the corporation must usually adhere to specific regulations to keep these types of protections in place.

Those guidelines are the next issue. Every corporate entity type has to meet certain requirements to keep the protections that the corporation enjoys. As an example, a C-Corp must typically submit articles of incorporation and choose a board of directors in order to retain its status. The corporate banking accounts can't be used as a private bank account by any individual associated with the corporation. There are commonly annual obligations that must be completed too. When those requirements are not fulfilled the corporation is said to be piercing the corporate veil, which may leave owners, investors, as well as officers of the firm individually answerable for damages, money owed, or settlements accrued in the corporation's name.

Each business is different, and there isn't any one-size-fits all answer. With 5 kinds of corporation to pick from (C-Corp, S-Corp, Close Corporation, LLC, and Non-Profit) it is a great idea to talk with an attorney or tax specialist prior to making your choice.

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Saturday, February 16, 2013

Understanding Power-of-Attorney

A power-of-attorney (POA) is a legal document or instrument which allows one person to have the legal right to take actions and/or make decisions on another person's behalf. With a broad power-of-attorney, the recipient is able to legally do virtually anything that the issuer could have done him- or herself. As such, a POA can be a very powerful device in both daily, transactional, and probate application.
Power-of-Attorney Basics
A power-of-attorney document is issued (or "executed") by a person called the Principal. This is the person who intends to delegate certain rights and responsibilities to another person, or to have that person act on his or her behalf. The person to whom rights and responsibilities are delegated is called the Agent or Attorney-in-fact. Depending on the terms of the POA, the Agent may be given the power to:
- Manage the Principal's property (including buying and selling)
- Invest, liquidate, transfer, or otherwise manage the Principal's financial assets
- Undertake litigation or deal with legal matters on the Principal's behalf
- Take other legal, financial, or property-related actions or decisions
It is important to remember that, although a POA gives great power to an Agent, the Principal is still in control of his or her own affairs, and can make decisions regardless of whether he has issued a power-of-attorney. For example, a power-of-attorney can be revoked at any time by the Principal for any reason. Certain types of POA may also become invalidated upon the Principal's death or incapacitation (i.e., if the Principal becomes mentally incompetent to make sound decisions).
Types of Power-of-Attorney
Powers-of-attorney are generally divided into three main categories: durable, non-durable, and springing.
Non-durable powers-of-attorney are POAs which take effect immediately and will become invalid, should the Principal die or become mentally incompetent.
Durable powers-of-attorney are POAs which take effect immediately but remain valid even if the Principal becomes mentally incompetent and last until the Principal dies.
Springing powers-of-attorney are POAs which are designed to take effect upon the occurrence of a certain event, such as the principal's death.
Choosing an Agent
Choosing the right Agent is a key step in drafting a power-of-attorney. An untrustworthy agent can destroy your finances, relationships, and legal standing with the powers that you delegate to them. Furthermore, it is usually up to the Principal or people close to him/her to monitor the actions of the Agent. Keeping accurate records can help catch evidence of abuse before too much damage is done.

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Friday, February 15, 2013

Should You Go For An Uncontested Divorce?

An uncontested divorce takes place when two parties come to an agreement on all terms. All the negotiations are done between the two parties outside of the court. Lawyers are present, but are not representatives of either party and primarily serve as advisors and to fill out paperwork. Hiring a lawyer in this case is not necessary, but generally they are not very expensive and help ease the burden. How long an uncontested divorce process lasts depends on how quickly the two parties are able to agree to all terms. Going this route however does have its pros and cons.

One benefit of uncontested divorces is that it's a far less expensive than being in court. You will save even more money however if you and the other party can do all the negotiations without the assistance of a lawyer. This is especially true if you are paying the divorce lawyer by the hour. Another advantage is the time that is saved. Divorce cases that go to court can take on average one year to be completed, sometimes even two years. An uncontested divorce generally will only last a few months, though this does vary based on the area you live in. But saving money is what makes this route so attractive, especially when your living expenses are going to change without your partner in the picture.

Uncontested divorces generally are far less emotional and dramatic than contested ones. This of course is because the two parties are working together and ultimately reaching an agreement. The relationship is able to at least become mutual, which is especially beneficial if children are involved. Plus, children won't have to suffer through a drawn-out divorce case.

Another benefit that you get with uncontested divorces is privacy. The negotiations are done behind closed doors just between the two parties, and only a limited amount of information will be released in the documents. All that will be public is the records.

Patience will be necessary however in uncontested cases. It's not often that both parties will agree on everything in the beginning. There will be some back and forth, so it's important that both are willing to work together and have an open mind. Just because there are some disagreements doesn't mean you should go running off to a judge.

So what are the downsides? Well, depending on the relationship, an uncontested divorce may not even be possible. If one party for instance was abused or under the control of the other, then it would be difficult for both sides to cooperate with each other. Each side should get a good deal, but this requires both to put aside differences.

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Thursday, February 14, 2013

Power of Attorney and Living Trust: Why Do I Need Both?

A Trust and a Power of Attorney for Finances serve two separate, but complimentary functions.
A Power of Attorney for Finances appoints someone to handle your money, property and bills when you are incapacitated. The person nominated should be someone who is good with money and responsible enough to care for your property. The person appointed is called an "attorney-in-fact", which has nothing to do with being a lawyer. A lawyer is an "attorney at law". A Power of Attorney for Finances is sometimes called a Durable Power of Attorney. "Durable" means the Power of Attorney remains valid, even if you become incapacitated. There can also be a "power of attorney for healthcare," that is a separate document and unrelated to your finances. Most lawyers mean a Power of Attorney for Finances when they say "power of attorney." If they mean the kind that is for healthcare, they generally say so.
A Living Trust can provide greater protection and easier management than relying upon a Power of Attorney alone. Think of a Trust as being a special box into which you place your assets (bank accounts, stocks, your home, rental properties, etc.) The person you appoint to take care of the box is called the "Trustee". This person is NOT the "Executor". An Executor is appointed in a Will, approved by a court, and only has authority after you die. A Trustee generally does not need court approval, and can handle things during your lifetime "and" after your death. This is why it is called a "living" trust. It is customary (though not required) to name the same person as Trustee and as attorney-in-fact, so that control of both Trust and non-Trust financial matters are centralized with one person.
Even if you have a Trust, you still need a Power of Attorney because it applies, during your lifetime, to management and control of your property that is "not" in the Trust. Certain property does not get put into your Trust during your lifetime. For example:
  • If you try to title your IRA to your trust, the IRS will treat that as an early withdrawal of the entire account. Your attorney-in-fact can direct IRA investments, contributions and withdrawals.

  • If you're receiving social security, your right to benefits can only be held personally, not in a Trust. Once a monthly benefit is paid to you, the amount paid can be placed in your Trust, but not prior to payment. Your attorney-in-fact can transfer social security payments into your Trust and access your records with the Social Security Administration.

  • Your attorney-in-fact has authority to prepare and sign your personal tax returns or speak to the I.R.S. about your taxes. Your Trustee does not.

  • Your attorney-in-fact, but not your Trustee, can make Medicare benefits elections and enforce your rights under Medicare.

  • If you forgot to put an asset into your Trust, your attorney-in-fact can make that transfer.
A good estate plan contains both of these important documents, but if you can only have one, choose the Power of Attorney. Without it, your loved ones will need a court ordered conservator or guardian to handle your property. This requires an expense and very public procedure. 

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Wednesday, February 13, 2013

When Do I Need An Advance Health Care Directive?

The answer to the question is NOW... and MAKE A PLAN for all eventualities and possible emergencies, which includes not only food and water, but also "documents." In addition to trust, will, durable financial power of attorney (POA), there must be a medical power of attorney or directive (the four principal document essentials). The Advanced Health Care Directive should be on file with the primary care physician, the hospital, and in personal files. I also have a copy attached to my refrigerator with a magnet... just in case an ambulance team might need ready access to my wishes. All my personal medical files are in an A-Z system in the Estate Documents Organizer records book under Healthcare so my daughter and sole heir has immediate and legal authorization to honor my wishes in a critical moment or at the end of life. (She will also have the location of all other financial and legal documents, passwords, pet information and all bank, credit cards and property records - at her fingertips!)

A personal story inspired me to take precautionary steps to prevent stress, chaos, and time issues for my daughter and other family members. Years ago, a dear friend attempted suicide and was in a death coma for several days. Her mother and sister "discovered" an executed Directive or "Do Not Resuscitate (DNR)" form in her desk and they were able to carry out her wishes and avoid years of medical treatment with no hope of recovery. Her mother told me, with great relief, that she was able to let her daughter go with peace and dignity. She so appreciated what her daughter had done to spare her family more trauma... in the devastating circumstances of taking her own life. My friend was 35 years old at the time!

My hospital told me about this form - or I would not have known where to find the form or how to complete it. Do you know the importance of this form - or that it exists? Do you have a properly executed Advance Health Care Directive (living will) - on file, known to your family members and physican? If not, I urge you to do so as soon as possible. Go online to find the form or see your physician or hospital to obtain a copy. Be sure it is filled out and signed correctly. Give yourself and your family "the gift of order and peace of mind."

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Tuesday, February 12, 2013

Health Care and Living Wills Versus Power Of Attorney

Within your own personal health care there is the end of life issues that can occur. Knowing how you want these handled is important, so that there are not other problems that can arise if the situation were to occur. Even where is a living will in place, a power of attorney should also be in place as well, this helps to ensure that all issues are thoroughly covered and you know you will be taken care of the way you want to in the event of end of life.
Living Will
A living will covers what to do and not do in the event that there are end of life decisions to make. This document only goes into effect when you are no longer able to make decisions yourself and you are incapacitated. This could be for numerous reasons, from a coma to an injury that has occurred. It also covers if you are completely mentally incapacitated as well. A living will typically covers: 
  • Medical Care That Prolongs Life - This is care and treatment that will prolong your life. This could be blood transfers, dialysis, drugs, surgery or respirators for instance.
  • DNR or Do Not Resuscitate Orders - These stipulations work with the above in the sense that you can specify whether you wish to be resuscitated or receive CPR. These types of orders should be specified to the hospital and doctors you work with, as well as wearing a medical alert bracelet that specifies this decision.
  • Food and Water That Prolongs Life - This specifies whether you want to receive food and water through external means. This can happen when there is an injury or a coma and a person can only live through intravenous food and water. Typically when these are stopped a person will pass away from dehydration. You can specify if you want this type of treatment, the conditions when this should happen and for how long this should go on for.
  • Management Of Pain - This is also called comfort care as well and it is when you decide to die naturally, but not in pain. You are kept comfortable while dieing to improve the quality of life and dignity in the event of death. You can specify that drugs do be administered to keep you comfortable, but not in pain.
Power Of Attorney
Even when there is a living will in place, a durable power of attorney for health care decisions is necessary and recommended. The agent is given only as much power as you decide and can cover all decisions that the living will does not cover. If you do not specify the amount of power given, many states allow the agent comprehensive power when it comes to end of life decisions. A durable power of attorney for health care can cover, but is not limited to: 
  • The power to consent to medical treatments.
  • The power to deny medical treatments.
  • This is as long as it does not go against anything that is already in your living will.
  • Making the decision of which medical facility to use.
  • They can make the decision of which doctors and other personnel to use for your treatment.
  • They can go to court on your behalf to determine whether to with hold or continue medical treatment.
  • The power to decide what to do with your remains and whether or not to donate your organs.
  • Make sure to specify your wishes on these matters in the living will and even in the power of attorney document when you have direct feelings about these practices.
  • They can access your medical records.
  • They typically do have visitation rights.

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Monday, February 11, 2013

Legal Documents That Every (Responsible) Adult Should Have

If you are like most people, you probably don't give a lot of thought as to end-of-life or what I will call "special circumstances" documents. Most of us are busy enough worrying over work, getting kids to little-league practice, and unfortunately for many, figuring out how to pay this month's bills. We often believe that we will have time down the road to take care of things like our Will, Living Will, etc. However, while death and taxes are both certainties, we only know the due date for one. Because of this, it is important that we plan accordingly now, so that we, and those we leave behind, may enjoy the blessings of the future. Here are three legal documents that every adult should have, and a couple of others that may be useful, in special circumstances.

Will (or more formally, Last Will & Testament) -

Most people without a will cite one of two reasons. First, they argue that they don't have much in the bank and they don't own any property so there is nothing to "give away." A will's primary function may indeed be to devise and dispose of the deceased's (testator's) property, but there are other important functions of a will. Most importantly, if there is a minor child of the testator, unless the will names a guardian to take over the parental duties of that child, a court-battle could ensue. The simple act of having a will and naming a guardian within that will, can save hundreds or thousands of dollars in legal fees, and more importantly, the heartache and strain a legal fight can cause for surviving family members and the child or children themselves.

Second, many believe that if they have no property and no children, a will serves no purpose. However, what may be true today may not be true a year from now. After getting married, having children, buying a house, or any of the other major life changes we encounter, the last thing people tend to do is run down to their attorney's office and execute important legal documents. They are busy enjoying their new lives. By executing a will now, before those things happen, most future problems can be eliminated, even if you don't know what property you may later acquire, or the name of your future wife or kids. If nothing else, because of state law provisions and attorney fees, not having a will can cost your surviving loved ones substantially more in the event probating the estate becomes necessary. Investing a couple hundred dollars now can save thousands after you're gone.

Living Will (or Advance Directive) -

Most of us remember the Terri Schiavo case from 2005. After she fell into a prolonged vegetative state, her husband and parents fought in court over whether she should be taken off of life support. After 7 years and 14 appeals, her feeding tube was finally removed for the final time and she passed away. The reason I bring up Ms. Schiavo is to illustrate how a simple legal document could have saved some of the pain that both sides must have gone through in litigating this for so long. The court wasn't easily able to determine whether Ms. Shiavo would have wanted her feeding tube removed or not because she had never executed a Living Will. This important document simply asks a series of questions about whether the signor wishes to receive certain life sustaining treatments in the event he or she is unable to speak for him or herself. Everyone should have a Living Will.

Medical Power of Attorney/Healthcare Proxy -

This document is used to name a person that will be authorized to make medical decisions on your behalf in the event that you are unable to speak for yourself. Unlike the Living Will above, this is not just for permanently unconscious situations. It may be used while suffering from a temporary ailment, which nonetheless, renders you unable to communicate with your doctor. Everyone should have a document naming a healthcare proxy, and this can often be done within the same document as the Living Will.

Durable Power of Attorney -

In 2012, Alabama, the state in which I practice law, passed and codified legislation radically changing many aspects of Power of Attorney (or POA) law. POAs executed prior to 2012 in Alabama are still valid, as long as they were valid under previous law. But new POAs need to comply with this new legislation. You will need to make sure that the POA document you use, complies with your state's laws. In essence, this document authorizes another person (called your agent) to handle your personal or business affairs, such as check and bank transactions, signing contracts, conveying real estate, executing income tax forms, etc. It is possible to grant your agent a "general" power, allowing them to handle most matters on your behalf or any of several "specific" powers. While POAs are an important tool for many people, they are not for everybody, and great care should be taken to avoid granting a POA to someone you do not trust completely. By definition, you are giving great power over your life and finances to another person, and such a decision should not be taken lightly.

Trust Instrument -

Revocable and/or Irrevocable trusts can be an important aspect of your estate planning. This is one of my "special circumstances" documents, and like the Power of Attorney above, may not be for everybody. It is typically for somewhat wealthy individuals who are trying to avoid estate tax and probate implications associated with death. Unfortunately, for most of us a trust may not be useful, however it is worth discussing with your attorney or estate planner.

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Sunday, February 10, 2013

What You Should Know About Advanced Health Care Directives in California

This video is about Advanced Health Care Directives in California. It discusses what it is, why everyone should set one up, who you should chose as your agent(s), and who you should give copies to

Saturday, February 9, 2013

What Is the Difference Between a Contested Divorce and an Uncontested Divorce?

When you and your spouse are seriously considering divorce, you'll find that there are several options for dissolution of marriage for you to consider, depending on your situation. In many states the two most common types of divorce are contested and uncontested.
In an uncontested divorce, both parties are able to work out the divorce terms without any input from the court. More divorcing couples prefer an uncontested divorce simply because it is generally less stressful and is less complicated compared to getting a contested divorce.
Of course, not all couples may benefit from an uncontested divorce. Couples who are in conflict with one another may have difficulty agreeing to common decisions brought about by a divorce, such as child custody, child support, spousal support, visitation, and division of assets.
An uncontested divorce usually involved drawing up a separation agreement mutually agreed upon by the divorcing parties, filing for dissolution of marriage, and attending a hearing. This entire legal process can take less than two months.
In some situations, however, an uncontested divorce does not go as planned and thus transitions to a contested divorce. Should this occur, then the services of a capable and experienced divorce attorney may be needed to ensure that your rights are protected at all times.
A contested divorce, on the other hand, is a type of divorce where both parties are unable to reach an agreement when it comes to all essential divorce terms. Contested is significantly more stressful and complicated compared to uncontested or mediated divorces, and could take several months or even years to resolve.
In a contested divorce, a court judge resolves the case if both parties are unable to resolve all contested points before the scheduled trial date. The judge bases the decision on the facts of the divorce case, including marital documents, records, and testimonies. Common parties who testify at the trial include you and your spouse, as well as witnesses who are testifying on your and your spouse's behalf.
Contested divorces usually always require the hiring of a family lawyer. It is always advisable to seek the counsel of an experienced lawyer in your area if you think your divorce will require going to trial. It's actually advisable to at the very least have a consultation with a family law attorney whether your divorce is contested or uncontested just to make sure your rights are protected.
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Thursday, February 7, 2013

Changing Your Will Versus Making A Brand New Will When It Is Time To Update Your Estate Plan

There may come a time when circumstances in your life have changed and you need to update your will. These circumstances can include a new marriage, a new child, a divorce, or having a new financial status such as winning the lottery and becoming a millionaire.

Updating a will can be done in two ways. You can change your existing will by making what is called a codicil or an official update that is made with same formalities as your will was. A codicil should not be made without the assistance of an attorney so you do not undo or change anything in your existing will that you do not want done. It can also be as expensive as an existing will as you are taking about the same time and work that a will takes. The changes you make in you codicil will also be on record as anybody will be able to see what you changed and what you originally had in your will. This could be a problem if your codicil gave a family member a smaller share of inheritance as the family member will be able to see what they would have received under the original will.

A second way that may be easier and more efficient way to update your will is to make a totally new will. This can easily solve the same problems that a codicil can with a newer document that gets rid of the changes made in the old will. A new will can also be better because it reflects your current state of mind and any changed circumstances that may have occurred since your last will was made. It is always a good idea not to leave doubt in the minds of anybody that could possibly read or interpret your will down the line in the future. They will not have the insight of what was going through your head when you were making the will and may have to rely on external clues that may or may not have any relation to what you were thinking about. It is better to remove all doubt from those who may read or challenge your will by making a fresh and current will that reflects your most current affairs in you life and your state of mind.

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Wednesday, February 6, 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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Tuesday, February 5, 2013

The Importance of a Durable Power of Attorney

Our elder has a living trust, which names who she wants as durable power of attorney. At the time it was created, we knew it would be helpful. Until March of 2012, we didn't know *how* helpful. It provided us with a means to care for her without going to court.
Incompetence: The durable POA is often the one turned to when an elder is declared incompetent. This is true whether there is a living trust or will. If court action is required, the POA is often the one chosen to handle an elder's affairs. Unless there is a living trust, most cases do have to go to court.
Medical Information: Privacy laws make it nearly impossible to get needed medical information. The person with the POA has access, as does the person who is medical POA. Often, they are the same person.
This has helped us keep in close contact with our elder's doctors. Signs of trouble are spotted early, and the freedom to communicate directly can help prevent some medical conditions from getting worse.
Monitoring Finances: Like the privacy laws for medicine, it's impossible to get timely financial information without this document. Privacy laws do allow the person with the POA to watch over spending patterns. This is extremely important. Our elder nearly lost $15k in a risky personal loan. Because her POA was watching, the loan didn't go through.
Paying Bills: It may be surprising, but even utility and insurance companies can't just hand out client information without documentation. The power of attorney documents can help open up these lines of communication. Some companies require more documents, but they all want this one.
If your elder has not designated who will hold this responsibility, it's important to encourage action. Doing so before problems occur will make later difficulties a little easier to handle.

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Monday, February 4, 2013

LLC, Corporation, Partnership: What's the Difference?

Many new businesses start out as sole proprietorships because this is the simplest form of ownership and requires very little paperwork or expense to start up. But for businesses with multiple owners or those needing outside funding, this usually isn't sufficient.
The three most common forms of ownership are Partnerships, Corporations and Limited Liability Companies (LLC's). There are other options, but most businesses use one of these operating forms and each has different treatment of taxes and legal issues for the owners.
This is a relatively easy form of ownership to set up as it only requires an agreement among the partners, which can be verbal or written. In a partnership, the owners manage and control the business and all revenue flows directly through the business to each partner, each of whom are then taxed based on their portion of the income.
The partners are personally liable for debts and any liabilities that result from the operation of the business. When one partner leaves the business, it is dissolved unless there is an agreement in place that allows it to continue.
A business continuation agreement will typically stipulate the terms under which a partner can transfer his or her share of the business for some financial consideration. The same agreement should provide for the transfer of a deceased partner's share so the surviving family receives fair compensation from the remaining partners.
Limited Liability Company (LLC)
The creation of an LLC requires an operational agreement and a filing of articles of organization with the state. Similar to partnerships, owners of an LLC control and manage the company. The company files an information tax return which reports each owner's share of the profits, but does not pay taxes directly. The owners report and pay tax on their personal returns based on their ownership share and the profits reported.
A primary difference between a partnership and an LLC is that LLC's can provide limited liability protection for the owners. This helps to insulate the owners from the debts and liabilities of the company. It is becoming a very popular alternative, as it is relatively easy to set up, usually has lower set-up costs than a corporation and avoids issues around dividends and the double taxation of profits that can occur in corporations.
LLC's are governed by the states in which they are formed and this means that the regulations around setting them up may vary from state to state.
Corporations are legal entities that are created by filing articles of incorporation with the state. Corporations provide protection from liability for the owners and do not have any restrictions on who can own shares or the number of shareholders you can have. This is usually the best bet when you have a large number of investors or for a business considering going public somewhere down the road.
There is a lot of confusion around the question of Sub-S corporations vs. C corporations. They are actually the same type of entity - the difference is in the way they are taxed. All corporations are C-corporations unless you file and receive approval from the IRS to be treated as a Sub-S for tax purposes. This is called electing Sub-S status. There are limitations on the number and type of owners you can have for Sub-S status, so not all corporations are eligible to file taxes on a Sub-S basis.
It is possible to switch from C corporation tax status to S-corporation tax status or vice versa, but there are time limitations about when you can and can't do so. A C corporation is a tax entity in and of itself, so it files a tax return and the corporation is taxed based on business profits. An S-Corp is similar to a partnership or LLC in that it files an information return (Form 1120S) and then the taxable income flows directly to the shareholder owners in proportion to their ownership.
In a C-corporation, an effective "double-taxation" can occur when the corporation pays dividends to owners out of profits which have already been taxed and then the shareholder owners pay tax on the dividend income reported to them.
Which Type is Best?
There is no right answer to that. This article summarizes key differences based on taxation and liability limitations, but there are many factors including your type of business, whether you are seeking funding, how many owners are anticipated, etc., that need to go into your decision. You can consult with an attorney and tax advisor to make the decision or use a specialty online service to get more information if you wish to do it yourself.
Ultimately the form of business ownership selected comes down to the owners' level of concern over management control, liability exposure, tax issues and business transfer issues. Because of the tax and legal implications involved, it is important to do the necessary due diligence before selecting an ownership form.

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Sunday, February 3, 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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