Estate planning for individuals who either can't or have chosen not to marry or have children poses some unique questions.
In my practice, clients often choose to leave their estate to siblings or nieces and/or nephews or to charity. There is no wrong answer so long as the client is comfortable with the eventual plan. The New York Times recent published an article addressing this issue: Estate Planning for the Never-Married.
While NYT is specifically focusing on individuals who have never-married, the questions are very similar for families comprised of two spouses. In encourage you to click through and think through the issues raised in this timely article.
As always, feel free to contact my office should you have any questions or would like to discuss further.
Saturday, October 1, 2016
Wednesday, June 1, 2016
Why a corporation might be your most valuable Fashion Accessory
What does it take to start a business - Customers!
That is it. So long as someone is willing to pay you for a product or service you offer; you have a business. That lemon-aid stand you started when you were 10 - just as real and legal of a business as my law firm. Well ... mostly legal, i'm guessing there may have been some health-code violations at play, but that is outside the scope of this blog post!
With starting your own business so easy and cheap, why in the would would you want to pay your friendly neighborhood lawyer to do "Business Formation" work?
Well, because Business Formation work is a misnomer. What is truly at play here is ENTITY formation. And entity formation is IMPORTANT!
As a Business or Asset owner, one of the scariest parts of the law allows creditors (those customers injured or angry) to seek your PERSONAL assets should your business not be able to cover their damages. This means, not only could you lose your investment or the company bank account .... but also your families home and vehicles.
And the Risk is Real!
If you own a retail establishment, someone could slip and fall and be injured in your store, then suing you for medical bills, pain, suffering, lost wages and more. Likewise, rental property carries with it the risk of visitors becoming physically injured on site.
Entrepreneurship also carries financial and contractual risks. You might be sued for money damages in a contract dispute due to a late delivery. Perhaps you are considering investing in real estate in a promising area that becomes a flop?
Given these facts, why would anyone go forward and take on the risk?
Because the law also provides an option to protect your personal assets. That option is the Corporation! Think of the corporation (whether that is C-Corp, S-Corp. or LLC) as an amazing article of protective clothing specially designed to protect you from the risks of business ownership.
The benefit you obtain from incorporating is called "Limited Liability" and we view the corporation as a veil! A Corporate Veil. Picture an individual wearing a veil (perhaps a bride in a trendy birdcage?) The veil serves to hide its wearer. Likewise, a disgruntled customer/supplier/third party cannot "see" the owners behind the corporation.
Limited Liability says that the Corporation/Business/Company is a SEPARATE entity from its owners (that's you!). As a Separate entity, the Business is solely responsible for it's own debts and obligations. The owners are not. The veil is in place to shield you.
Conclusion - Explore Entity Formation not because you need help starting a business ... but because you need help mitigating risk!
Each state has unique laws in place outlining the requirements to set up a corporation as the entity which operates a business and to maintain healthy "separateness" between the owners and that corporation. (If you fail to maintain separateness, the Veil can be Pierced revealing the owners to personal risk again). These details are far too nuisanced for an information blog, however are important to explore as you begin this exciting journey as a Business Owner!
That is it. So long as someone is willing to pay you for a product or service you offer; you have a business. That lemon-aid stand you started when you were 10 - just as real and legal of a business as my law firm. Well ... mostly legal, i'm guessing there may have been some health-code violations at play, but that is outside the scope of this blog post!
With starting your own business so easy and cheap, why in the would would you want to pay your friendly neighborhood lawyer to do "Business Formation" work?
Well, because Business Formation work is a misnomer. What is truly at play here is ENTITY formation. And entity formation is IMPORTANT!
As a Business or Asset owner, one of the scariest parts of the law allows creditors (those customers injured or angry) to seek your PERSONAL assets should your business not be able to cover their damages. This means, not only could you lose your investment or the company bank account .... but also your families home and vehicles.
And the Risk is Real!
If you own a retail establishment, someone could slip and fall and be injured in your store, then suing you for medical bills, pain, suffering, lost wages and more. Likewise, rental property carries with it the risk of visitors becoming physically injured on site.
Entrepreneurship also carries financial and contractual risks. You might be sued for money damages in a contract dispute due to a late delivery. Perhaps you are considering investing in real estate in a promising area that becomes a flop?
Given these facts, why would anyone go forward and take on the risk?
Because the law also provides an option to protect your personal assets. That option is the Corporation! Think of the corporation (whether that is C-Corp, S-Corp. or LLC) as an amazing article of protective clothing specially designed to protect you from the risks of business ownership.
The benefit you obtain from incorporating is called "Limited Liability" and we view the corporation as a veil! A Corporate Veil. Picture an individual wearing a veil (perhaps a bride in a trendy birdcage?) The veil serves to hide its wearer. Likewise, a disgruntled customer/supplier/third party cannot "see" the owners behind the corporation.
Limited Liability says that the Corporation/Business/Company is a SEPARATE entity from its owners (that's you!). As a Separate entity, the Business is solely responsible for it's own debts and obligations. The owners are not. The veil is in place to shield you.
Conclusion - Explore Entity Formation not because you need help starting a business ... but because you need help mitigating risk!
Each state has unique laws in place outlining the requirements to set up a corporation as the entity which operates a business and to maintain healthy "separateness" between the owners and that corporation. (If you fail to maintain separateness, the Veil can be Pierced revealing the owners to personal risk again). These details are far too nuisanced for an information blog, however are important to explore as you begin this exciting journey as a Business Owner!
Subscribe to:
Posts (Atom)