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Trusts

05/15/2015

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Some people may have preconceived notions about trusts and believe that they are only for multi-millionaires who wish to leave large trust funds to their children. However, trusts can be invaluable tools in the estate plans of millions of individuals.

Trusts are simply an arrangement where one party holds property on behalf of another party. In an estate planning context, trusts are created by the person doing the estate planning (the settlor), who authorizes another person (the trustee) to manage the assets for the benefit of a third party (the beneficiaries). There are many reasons for establishing trusts including tax minimization or providing for the needs of underage beneficiaries.

 
 
Aunque nadie quiere pensar en la muerte o discapacidad, establecer una planificación de bienes es uno de los pasos más importantes que usted puede tomar para protegerse usted y a sus seres queridos. Una planificación apropiada no solamente lo pone a cargo de sus finanzas, también podrá ahorrarles a sus seres queridos los gastos, retrasos y frustraciones asociadas con el manejo de sus asuntos cuando usted fallezca o se incapacita.

 
 
It is not uncommon for individuals or businesses to find themselves involved in a legal dispute with another party. Disputes of this nature, such as a breach of contract, typically fall under what is known as civil litigation which entails the use of courts or arbitrators for adjudication.

For plaintiffs involved in a civil litigation matter, the objective is to right a wrong, honor an agreement, or to obtain compensation for an injury.  On the other hand, defendants in a civil litigation matter want to aggressively protect their rights in opposing the plaintiff’s claim.

 
 
Family ties are thought to be the most private and enduring relationships in society. As most can attest, however, these relationships are rarely free from conflict. When domestic issues cannot be solved within the home, family law seeks to restore order and provide a fair resolution for all parties involved.

For many, family law is thought to be synonymous with divorce proceedings. In reality, divorce is just a small part of family law which covers a broad array of domestic issues including adoption, premarital agreements, paternity and child support issues.

When legal action is necessary to resolve familial matters, it is essential that you entrust your most private matters to a compassionate and knowledgeable family law attorney. Our dedicated attorneys and staff serve as good listeners, confidants and advocates for all of our clients during their most difficult times.

 
 
More and more people are using the legal system to deprive others of their life's work.   Over 19 million new lawsuits are filed in the United States every year, many of which are frivolous or settled for sums greater than the actual liability.

Business owners, professionals such as doctors, dentists, lawyers and accountants, and property owners in particular should be aware of the risk associated with conducting their business, practicing in their respective fields, and taking responsibility for others.

Without a massive overhaul of our legal system, the risk and potential liability is not going to decline. In fact it has steadily increased over the last few decades.  Assets can be at risk due to a number of vulnerabilities, including:
  • Professional malpractice liability
  • Personal liability of corporate officers and directors
  • Lawsuits by former business partners
  • Personal injury suffered on your premises
  • Personal injury resulting form a motor vehicle accident
  • Liability as guarantor for the debts of another
  • Liability arising from misconduct
Asset Protection is not about giving in to fear.  It is about empowering yourself in the face of it. Our firm will work with clients to implement proven, legally-sound strategies that will help preserve their wealth and safeguard their assets. 

We represent professionals, small business owners, property owners, and other clients with the goal of protecting their assets against potential litigation, judgments, liens, and fraud.

Insurance alone does not always adequately protect against all of these threats.  We help clients protect their wealth using a variety of strategies including the use of special trusts, business entities and other legal arrangements.

Shielding Assets from Creditors
Our firm has expertise in assisting clients to arrange their finances, real property and other assets in a manner that minimizes their exposure to potential creditors.  We are well versed in establishing trusts, determining insurance needs, creating estate plans and organizing investments and business entities so that our clients are able to enjoy the highest level of confidence in terms of the security of their accumulated assets.

A creditor who initiates litigation against a person who has placed his or her assets into a trust, a foundation, or other entity may find that there are very few collectible assets actually owned by the person they wish to sue. Assets owned by a properly structured trust, foundation, or other entity are generally not subject to claims against their beneficiaries. In addition, placing assets into an asset protection entity may have the additional benefit of removing those assets from a person’s taxable estate.

We know how to evaluate current client holdings and work with our clients to identify the best ways to legally protect those holdings from a variety of creditors, whether through civil suits involving negligence or malpractice.
 
 
While nobody wants to think about death or disability, establishing an estate plan is one of the most important steps you can take to protect yourself and your loved ones. Proper estate planning not only puts you in charge of your finances, it can also spare your loved ones of the expense, delay and frustration associated with managing your affairs when you pass away or become disabled.

Oftentimes, clients view Estate Planning as only wills, trusts and other ancillary documents.  Although an estate plan may use some or all of these important documents, estate planning is the process by which we determine which tools are best for our clients' specific values, goals and concerns.  We partner with business owners, professionals and families to identify what is most important to each client, and design a plan to meet those specific values, goals and needs.  We also advise families of individuals with specials needs to tailor a plan that meets each families' unique needs.  Our firm's services include: 

 
 
Our firm advises and represents companies and entrepreneurs with a broad range of business related services.  We advise business owners, entrepreneurs and managers on business law, start-up assistance including the formation of an entity and on the protection of a trademark or license agreement.  We also assist with the process of buying or selling a business.

Business Start-up Services

Starting a business requires thorough planning. Our firm assists business owners in the formation of legally sound business entities and helps entrepreneurs devise business strategies that help them achieve their goals. We advise on the business start-up and formation process as well as issues related to selection of entity type and jurisdiction, including:
  • Subchapter C-corporation formation
  • Subchapter S-corporation formation
  • Limited liability company (LLC) formation
  • Partnership formation (including LLP)
  • Stock purchases
  • Asset purchases
  • Joint ventures
We also advise on and draft shareholder agreements, membership agreements or partnership agreements as part of the entity formation process.

Preparation and Review of Business Contracts

In consultation with business owners, we review, draft and negotiate contracts related to various business activities, including:
  • Buy-sell agreements
  • Service contracts
  • Releases and waivers
  • Property agreements
  • Shareholder agreements
  • Operating agreements
  • Lease agreements
 
 
Limited Liability Partnership (LLP) or sometimes called a registered limited liability partnership (RLLP), provides all of its owners with limited personal liability. LLPs are particularly well-suited to professional groups, such as lawyers and accountants. In fact, in some states LLPs are only available to professionals.

Professionals often prefer LLPs to general partnerships, corporations, or LLCs because they don't want to be personally liable for another partner's problems -- particularly those involving malpractice claims. An LLP protects each partner from debts against the partnership arising from professional malpractice lawsuits against another partner. (A partner who loses a malpractice suit for his own mistakes, however, doesn't escape liability.) Forming a corporation to protect personal assets may be too much trouble, and some states (including California) won't allow licensed professionals to form an LLC.

 
 
CORPORATIONS
A corporation is a legal entity created through the laws of its state of incorporation. Individual states have the power to promulgate laws relating to the creation, organization and dissolution of corporations. Many states follow the Model Business Corporation Act. State corporation laws require articles of incorporation to document the corporation's creation and to provide provisions regarding the management of internal affairs. Most state corporation statutes also operate under the assumption that each corporation will adopt bylaws to define the rights and obligations of officers, persons and groups within its structure. States also have registration laws requiring corporations that incorporate in other states to request permission to do in-state business.

There has also been a significant component of Federal corporations law since Congress passed the Securities Act of 1933, which regulates how corporate securities are issued and sold. Federal securities law also governs requirements of fiduciary conduct such as requiring corporations to make full disclosures to shareholders and investors.

The law treats a corporation as a legal "person" that has standing to sue and be sued, distinct from its stockholders. The legal independence of a corporation prevents shareholders from being personally liable for corporate debts. It also allows stockholders to sue the corporation through a derivative suit and makes ownership in the company (shares) easily transferable. The legal "person" status of corporations gives the business perpetual life; deaths of officials or stockholders do not alter the corporation's structure.

Corporations are taxable entities that fall under a different scheme from individuals. Although corporations have a "double tax" problem -- both corporate profits and shareholder dividends are taxed -- corporate profits are taxed at a lower rate than the rates for individuals.

Corporate law has important intersections with contracts and commercial transactions law.


 
 
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Asset protection is a process by which one organizes their financial affairs in such a manner as to safeguard assets from the risk of exposure. The process of asset protection involves transferring the assets from an unprotected form of ownership to a protected form of ownership. The unprotected form generally applies to property held directly in an individual’s name of even the name of a revocable living trust. The protected form can be one of many asset protection vehicles such as limited partnership, corporations, certain kinds of trusts, limited liability companies and other such entities. Protecting assets can also be a process of transferring them into exempt assets to the extent permitted by the individual states.

However, care is cautioned in utilizing exemptions as a form of asset protection. Certain creditors are not subject to state exemption. Some of these examples are federal tax liens, state tax liens, alimony and child support, purchase money retailers, and mechanics liens.

Due to the lottery style court cases and judgments that exist today, a well drafted asset protection plan can go a long way in deterring a creditor. If you can avoid the appearance of being the “deep pocket” then you can frequently be passed over and the creditor will look to someone else. In fact deterrence is a major part of asset protection. The plaintiff is generally unwilling to mount countless attacks against a defendant who has a well established asset protection plan. Judgment creditors are cost conscious and if the efforts to collect are just too difficult, then that creditor is likely to settle for far less than the amount of the judgment or move on to easier pray.