-To Incorporate or Not to Incorporate - That is the Question-
-I Don't Need no Stinking Living Trust-
To Incorporate Or Not To Incorporate - That Is The Question
by Attorney Ethan F. Miller-Bazemore
For those of you running the family business or contemplating starting up
your own business, the word "incorporated" or abbreviations "Inc." and
"L.L.C." should become a part of your vocabulary.
Starting one's own business is a huge leap that is full of potential
potholes and traps that can often cause more headache then joy (Don't
get me wrong, once the thing is up and running, the perks and
advantages will start to show themselves). But, with the massive list of
"to do's" associated with starting a business, it is easy to overlook key
steps in setting up the foundation for a legally sound operation.
It is absolutely true that one can start doing business with very little legal
insight or know how. However, this could very well turn out to be a recipe
for disaster. Not only are you possibly limiting the growth your company
can make, you may be exposing yourself and your family to tremendous
amounts of unnecessary liability. It is a reality that lawsuits happen and,
unfortunately, sole proprietors/informal business entities are gambling
everything they own on the fact that it won't happen to them. The good
news is that there are legal ways to shield you and your family from
liability. Other equally important concepts like tax treatment,
management, and transferability of ownership interests should also be
addressed by forming the appropriate business entity. The information
and choices available to the businessperson are plentiful and are easily
explained by a qualified attorney. It is absolutely essential that all
prospective and current business owners at least learn what
S Corporations, C Corporations, or Limited Liability Companies are,
and what they could mean to them.
The idea of incorporating may sound daunting, but it shouldn't. This area
of the law has been designed to help the business person structure their
business, and the ideas can easily be grasped if competently explained.
This office would be happy to meet with you to give you more information
on business entity formation.
Soon, you can visit us at www.mycorporatelaw.com and learn more
about incorporating, the process, download our questionnaire, and
review other useful charts and tables
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I Don't Need No Stinking Living Trust
by Attorney Ethan F. Miller-Bazemore
Most of us spend our lifetimes attempting to build wealth for a
comfortable retirement. We pinch pennies here and save cans there
hoping that, in the end, the sun will shine a little brighter in that exotic
location. We clip coupons, watch sales, drive farther for that
cheaper price, and generally are on the hunt for the deal of the century.
However, most of us have not considered what happens to our egg once
we have permanently exited the nest. That is, what kind of situation are
our loved ones going to be in when dealing with our estate.
The usual course of events finds an estate going through what is called a
"Probate." This is a system that has been set-up to distribute your assets
according to your wishes (if you have a will), or according to state law
(if you die without a will) with the courts acting as big brother and
overseeing the whole thing. The process is very slow (taking anywhere
from 6 months to 2 years) and the costs are high (set by statute
according to size of estate). Most folks think they have done their duty by
having a will prepared and naming an executor (usually a close friend or
family member) to handle the day-to-day management of their estate
until it's finalized. That's it. That's usually the extent of a person or
couple's estate plan (not really much of a "plan").
The other way an estate passes is through a living trust. Transfer of the
deceased's property is accomplished much more quickly. It begins as
soon as the person passes away and requires no appearance or court
interaction. A successor trustee (again, usually a close friend or family
member) merely follows the directions listed in the trust and distributes
everything pursuant to the wishes of the deceased. To put the icing on
the cake, you'll name yourself as the first trustee so that you'll have
complete control over the trust while you are alive. That means that you
can continue to manage your assets as you choose. Furthermore, the
trust is fully revocable - you can dissolve it at any time. Are you thinking:
"I/We don't need one of those living trust things," "I/We don't really have
that many assets," "I/We aren't wealthy," "I'm single and don't have
anyone to consider," etc. The fact is, everyone probably has an estate
(whether it's a house, jewelry, art, etc.). Okay, I know a few of you are
saying, "Hey, I only got the shirt on my back." Well, my response is you
still should think about a living trust. Consider who would be appointed
guardian of your children's money should you become incapacitated,
or who would manage your affairs and make your healthcare decisions
should you be unable to do so. These are just a few of the many
non-asset issues that can be addressed by a living trust.
Finally, here is the key part: even with a will, probate fees on a smaller
estate ($250,000 home, paid for or not) can run more than $13,000.
That's well over fifteen times the cost of a living trust (and I haven't even
talked about the tax implications).
So, unless you're pinching those pennies and clipping those coupons for
later probate fees, consider a living trust and bypass the probate
process. This provides you with the control over when your assets are
distributed, complete privacy with regards to how your estate is handled
(your will becomes public record once it is probated), and absolute
control over how your assets are spent.
As with most sophisticated things in life, estate planning is not a
do-it-yourself project. Estate laws can be complex and can vary
according to the size of the estate. I know it's tempting to go the
"Estate Planning For Dummies" route, but the name may prove to be
more truthful than the publishers actually think. Consulting a tax advisor
and attorney to see if a living trust may be appropriate for you is a
no-lose situation. If you would like to learn more about living trusts, or are
interested in having one prepared, please inquire about scheduling an
appointment.
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Copyright © 2008 Law Offices of Miller & Miller-Bazemore
