<![CDATA[Arizmendi Law Firm, San Diego Business, Estate Planning & Bankruptcy Law - BLOG]]>Fri, 20 Oct 2017 10:46:10 -0800Weebly<![CDATA[Trusts]]>Sat, 16 May 2015 02:50:21 GMThttp://arizmendilawfirm.com/2/post/2015/05/trusts.htmlSome 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.
Some types of trusts that may be useful in an estate planning context are:

  • Trusts for minors.  As part of estate planning, many individuals leave money to their children or their grandchildren in a trust. This is typically done to insure the money is there for the children’s benefit while they are younger, for support, education, medical expenses, etc. Once the children reach a certain age or a certain achievement level (such as obtaining a bachelor’s degree), they may receive money from the trust to do with as they please.
     
  • Special needs trusts. Special needs trusts are tools that enable a person to leave property to an individual with special needs. Many individuals with special needs receive government benefits. If they suddenly inherit money, they would be disqualified in most cases from those benefits until the inheritance was spent. Special needs trusts protect those individuals’ government benefits while allowing them to have money for extras they may need.
     
  • Marital trusts.  Married couples sometimes include trusts in their wills, or separately, for the benefit of their spouse, typically for two reasons: (1) taxes, and (2) property protection. In previous years, marital trusts were needed for some couples to take advantage of estate tax exemptions, and they may be needed in the future as the laws change. Marital trusts can also protect property from a spouse to ensure that it ultimately goes where it needs to go – for example, a husband with grown children from a previous marriage may decide to let his wife use his property after he passes, but puts it into a trust so that after she passes away, it goes to his children.
     
  • Revocable living trusts.  Revocable living trusts are documents completely separate from wills. They sometimes work hand in hand with wills to carry out the decedent’s wishes. Revocable living trusts are primarily used to avoid probate in states where probate is particularly cumbersome, or in a few other instances, such as where a person owns real estate in multiple states or when a person wishes to disinherit a family member or otherwise limit that family member’s interest in the estate.

    Irrevocable life insurance trusts.  Irrevocable life insurance trusts (or ILIT’s) can be used in order to get a person’s life insurance proceeds outside his or her estate for estate tax purposes.
     
  • Spendthrift trusts.  Spendthrift trusts are generally established to protect the beneficiaries’ assets from both themselves and creditors.  These trusts usually have an independent trustee which has complete discretion over the distribution of assets of the trust.
There are many different types of trusts, each of which can be customized to serve a valuable purpose in accomplishing the wishes of those making gifts or planning an estate. 

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<![CDATA[Litigios Civiles Planeamiento de Estado]]>Fri, 15 May 2015 06:04:48 GMThttp://arizmendilawfirm.com/2/post/2015/05/litigios-civiles-planeamiento-de-estado.htmlAunque 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.
Prever por Discapacidad 
Si usted se incapacita, no podrá manejar sus propios asuntos financieros. Muchos están bajo la impresión equivocada de que su esposa(o) o hijo adulto podrá automáticamente tomar posesión de ellos en caso de que se incapacite. La verdad es que para que otros puedan manejar sus finanzas, esas personas tienen que hacerle una petición a la corte para declararlo legalmente incompetente. Este proceso puede ser largo, costoso y estresante. Si esto ocurre, la corte asignala persona que usted hubiera escogido; ellos luego tenienen que volver a la corte cada año y demostrar como están gastando e invirtiendo el dinero que usted le dejo para cuidarlo. Si usted quiere que su familia sea capaz de tomar posesión inmediatamente de sus deciones y sobre usted mismo, deberá designar a una persona o personas que usted confíe mediante un documento legal específico para que así esa persona tenga la autoridad de manejar sus cuentas financieras, y tomar ciertas acciones por usted como pagar cuentas, tomar distribuciones de su pensiones o cuentas de retiro, vender acciones y refinanciar su casa. Un testamento no toma efecto hasta que usted fallezca y un poder de un abogado podría ser insuficiente.Además de planear sobre el aspecto financiero de sus asuntos durante su incapacidad, usted debería establecer un plan para su cuidado medico. La ley le permite que designe a alguien que usted confíe – por ejemplo, un miembro de la familia o a un amigo cercano; para tomar decisiones en su nombre acerca de opciones sobre tratamientos médicos si usted pierde la habilidad de decidir por si mismo. Usted puede lograr esto utilizando un poder revocable para la atención médica en donde usted designara a la persona que tomaría dichas decisiones. Además de un poder revocable para la atención médica, usted también deberá tener un testamento de vida en el cual le informa a otros de su tratamiento medico preferido así como también el uso de medidas extraordinarias si se vuelve inconsciente permanentemente o con una enfermedad terminal.

Evadiendo Juicios
Si le deja su patrimonio a sus seres queridos utilizando un testamento, todo lo que es de su propiedad pasara por un juicio. El proceso es costoso, consume tiempo y esta abierto al público. El juzgado testamentario estará en control del proceso hasta que el patrimonio haya sido resuelto y distribuido. Si usted esta casado y tiene hijos, querrá dar por hecho que su familia sobreviviente tiene acceso inmediato a sus cuentas y fondosefectivo para pagar los gastos de subsistencia mientras su patrimonio es resuelto. No es inusual para los juzgados testamentarios el congelar de los actos sobre el estado financiero del fallecido durante semanas y hasta meses mientras tratan de determinar la propia disposición del patrimonio. Su sobreviviente esposa(o) puede ser forzada(o) a aplicar al juzgado testamentario para obtener fondos en sus cuentas para pagar los gastos mas sencillos de su familia. Se podrá imaginar lo estresante que este proceso puede ser. Con un planeamiento apropiado, sus bienes podrán pasar a sus seres queridos sin ningún juzgado testamentario, de una manera rápida, económica y privada.

Proveer para Hijos Menores de Edad
En su planificación de bienes deberá también señalar los asuntos referentes a la educación de sus hijos. Si tiene hijos jóvenes, usted puede querer que su esposa(o) sobreviviente tenga la opción de no trabajar fuera del hogar para que el o ella pueda dedicarle mas atención a sus hijos. Si su esposo(a) no tiene experiencia en materia financiera, su plan de bienes deberá proveerle asistencia con el manejo financiero, como el establecimiento de fideicomisos. Además, su plan de bienes deberá considerar las consecuencias de las dos muertes, la de usted y la de su esposa(o) simultáneamente. Si usted tiene un hijo menor de edad, usted querrá seleccionar a alguien para manejar sus activos para su beneficio a lo contrario a dejar esta decisión con la corte. En esta situación, su plan de bienes también deberá especificar el momento en que su hijo recibirá sus bienes por completo, libre de fideicomiso. Con demasiada frecuencia los niños reciben bienes de mucho valor antes que sean lo suficientemente maduros para manejarlos apropiadamente, con resultados devastadores.
Mas urgente que los asuntos financieros es la cuestión de la selección de los tutores legales quienes criaran a sus hijos si usted y su esposo(a) fallecen prematuramente. Usted debe pensarlo cuidadosamente al seleccionar a los tutores, asegurando que el o ella comparten los valores que usted quiere sean inculcados en sus hijos. Al mismo tiempo, usted querrá considerar la edad y la condición financiera del tutor potencial. Algunos tutores pueden carecer de habilidades de crianza de niños que usted siente que son necesarias. Asegure que su plan no cree una carga financiera adicional para el tutor.

Planificación para Impuestos de Muerte
Sin importar que halla pagado impuestos en exceso durante su vida, el tío Sam querrá revisar sus bienes cuando usted fallezca para asegurar que usted no le debe al gobierno algún impuesto final: el impuesto federal de bienes. Así existen cualquier impuesto por pagar dependerá en el tamaño de su patrimonio y como trabaje su plan de bienes. Muchos estados tienen por separado sus propios impuestos de bienes y herencias del cual usted necesita estar consiente. Existen muchas estrategias bienestablecidas que pueden ser implementadas para reducir o eliminar los impuestos de muerte, pero para poder implementar muchas de estas estrategias deberá comenzar a planear el proceso desde temprano.

Donaciones Caritativas
¿Tiene usted una causa, caridad u organización religiosa favorita? Usted puede utilizar su plan de bienes para proveer asistencia a estas organizaciones, sea durante su vida o al momento de su muerte. Esta es una de las pocas instancias en el cual nuestro gobierno provee incentivos para que haga esto.

Usted ha trabajado duramente su vida entera para proveer por su familia y seres queridos. Sin estrategias avanzadas de planificación de propiedad, mucha de los bienes o beneficios que son fruto de su trabajo pueden acabar con el gobierno federal y estatal.
Nuestra empresa ayuda regularmente las familias con patrimonios de gran valor con tal planificación para determinar que estrategias sofisticadas se pueden tomar para proteger sus bienes y patrimonio. Estas estrategias incluyen: Sociedades limitadas Familiares u Obligación Limitada Compañías, Confianza Personales de Residencia, Confianza Irrevocables de Seguros de vida y una gran variedad de técnicas caritativas para reducir Impuestos Federales de Propiedad, los Impuestos sobre donaciones y la Generación que Saltan Impuestos de Transferencia.

Sociedades limitadas familiares
Una Sociedad limitada Familiar (FLP) es una forma de una sociedad limitada entre miembros de una familia. Las principales ventajas de formar y financiación de que un FLP implica los ahorros de propiedad e impuesto sobre donaciones y protección de ventaja. Un FLP también le permite retener control sobre las ventajas transferidas al disfrutar de estas ventajas.

Una vez que el FLP es establecido y sus ventajas son transferidas a sociedad, usted puede hacer regalos de intereses de sociedad limitada a sus niños u otros beneficiarios. Esto se logra en varias propiedades diferentes y required de planeación de objetivos simultáneamente.

La Residencia Personal Calificada
Nuestras casas son a menudo nuestros bienes mas valiosos y de ahí uno de los componentes más grandes de nuestro patrimonio. Una Confianza Personal Calificada de Residencia o un QPRT le permite regalar su casa o las vacaciones en casa a un gran descuento, congelar su valor con respeto a impuestos de propiedad, y todavía continuar viviendo en ella. Así trabaja: Usted transfiere el título a su casa al QPRT (generalmente en beneficio de sus miembros de la familia), reservando el derecho de vivir en casa para un número especificado de años. Si usted vive al fin del período especificado, la casa (así como cualquier apreciación en su valor desde la transferencia) pasa a sus niños u otros beneficiarios libre de cualquier impuesto sobre donaciones or regalos adicionales. Después del fin del período especificado, usted puede continuar viviendo en la casa pero usted debe pagar el alquiler a su familia o el beneficiario designado para evitar inclusión de la residencia en su patrimonio. Si usted se fallese antes del fin del período indicado, el valor completo de la casa será incluido en su patrimonio con respeto a impuesto de propiedad, aunque en la mayoría de los casos este resultado es mejor que no establecer un QPRT. Un beneficio adicional del QPRT es que también sirve como un excelente vehículo de protección de ventaja/acreedor porque que usted ya no posee la propiedad una vez que su residencia es transferida al QPRT.

Los Seguros de Vida Irrevocables se Fían
Hay una equivocación común que pagos de seguros de vida no son sujeto a Impuestos Federales de Propiedad. Mientras continúen recibiendo pagos de cualquier impuesto, estos fondos son incluibles como parte de su patrimonio e ingresos y por lo tanto, sus beneficiarios pueden terminar pagando mas de la mitad de los fondos que resultan del seguro en impuestos.

Una Confianza Irrevocable de Seguros de vida es creada específicamente con el propósito de proteger estos bienes que resultan de un seguro de vida. Una confianza apropiadamente establecida y administrada mantien a la políza fuera de su patrimonio

Nuestra empresa esta dedicada ayudar clientes para determinar que opción es mejor para usted y su familia o beneficarios. Con esta educación usted puedo tomar decisiones informadas acerca de sus bienes. Trabajamos con usted y con su equipo de asesores financieros y contadores públicos para aplicar un plan sumamente sofisticado de planeacion de bienes y patrimonio.

El beneficio principal de un plan de bienes bien planeado, es que ese plan le provee a sus seres queridos  una manera efectiva y eficiente para eliminar custodias legales, juicios testamentarios, impuestos de bienes y retrasos innecesarios. Disminuirá no solo su propio estrés pero también el de sus seres queridos. Vale el tiempo, esfuerzo y costo.

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<![CDATA[Civil Litigation]]>Fri, 15 May 2015 03:58:27 GMThttp://arizmendilawfirm.com/2/post/2015/05/civil-litigation.htmlIt 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.
Whether you are a plaintiff or defendant, hiring a qualified civil litigation attorney is crucial in achieving a successful outcome in your case.Our civil litigation lawyers represent plaintiffs and defendants including individuals, partnerships, shareholders and corporations in the following types of cases:

Business related litigation
  • Fraud
  • Breach of contract
  • Dissolution or breakup of a business
  • Unfair business practices
  • Business disputes
  • Trade secrets
  • Non-compete covenants
  • Securities matters
  • Breach of warranties
  • Mechanics’ liens
  • Employment litigation

Real estate and construction litigation
  • Real estate litigation
  • Landlord-tenant litigation
  • Construction defects
  • Premises liability

Arizmendi Law Firm work closely with clients to evaluate their potential claims or defenses related to the commercial, professional, employment, and personal dispute that is the subject of litigation.   We represent clients before administrative agencies, alternative dispute resolution proceedings such as mediation or arbitration, jury or court trials in state and federal court as well as proceedings before appellate courts. We help clients prepare their cases and counsel them on steps and procedures involved.  A skilled civil litigation attorney can help clients leverage their negotiating position to reach a beneficial settlement which may be the most appropriate and economical manner of handing certain cases.  However, when a dispute cannot be resolved satisfactorily, taking a case to court may be the best or only option.

When required, our civil litigation attorneys will engage and work closely with experts including investigators, accountants, economic impact analysts, and other relevant professionals. 

If your legal dispute has risen to the level of civil litigation, we are ready to help.

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<![CDATA[Family Law]]>Fri, 15 May 2015 03:41:38 GMThttp://arizmendilawfirm.com/2/post/2015/05/family-law.htmlFamily 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.

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<![CDATA[Asset Protection]]>Fri, 15 May 2015 03:31:06 GMThttp://arizmendilawfirm.com/2/post/2015/05/asset-protection.htmlMore 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.
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<![CDATA[Estate Planning]]>Fri, 15 May 2015 03:15:11 GMThttp://arizmendilawfirm.com/2/post/2015/05/estate-planning-overview.htmlWhile 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: 
Providing for Incapacity
If you become incapacitated, you won’t be able to manage your own financial affairs. Many are under the mistaken impression that one’s spouse or adult children can automatically take over for them if they become incapacitated. The truth is that in order for others to be able to manage your finances, they must petition a court to declare you legally incompetent. This process can be lengthy, costly and stressful. Even if the court appoints the person you would have chosen, the individual may have to come back to the court every year and show how he or she is spending and investing each and every penny. 

If you want your family to be able to immediately take over for you, it’s essential that you work with an attorney to create the proper legal documents to designate a person, or persons, that you trust so they will have the authority to withdraw money from your accounts, pay bills, take distributions from your IRAs, sell stocks, and refinance your home. Many people mistakenly think that a simple will can effectively protect you in the event that you become incapacitated, but the truth is that a will does not take effect until you die.
 
In addition to planning for the financial aspect of your affairs during incapacity, it’s critical that you establish a plan for your medical care. The law allows you to appoint someone you trust - for example, a family member or close friend to make decisions on your behalf about medical treatment options if you lose the ability to decide for yourself. You can do this by using a durable power of attorney for health care where you designate the person to make such decisions on your behalf. In addition to a power of attorney for health care, you should also have a living will which informs others of your preferred medical treatments such as the use of extraordinary measures should you become permanently unconscious or terminally ill.
  
Providing for Minor Children

It is important that your estate plan address issues regarding the upbringing of your children. If your children are young, you may want to consider implementing a plan that will allow your surviving spouse to devote more attention to your children, without the burden of work obligations. You may also want to provide for special counseling and resources for your spouse, if you believe they lack the experience or ability to handle financial and legal matters. You should also discuss with your attorney the possibility of both you and your spouse dying simultaneously, or within a short duration of time. A contingency plan should include a list of persons you’d like to manage your assets and name a guardian you’d like to nominate to raise your children in your absence. The person, or trustee, in charge of the finances need not be the same person as the guardian. In fact, in many situations, you may want to purposely designate different persons to maintain a system of checks and balances. 

You should give careful thought to your choice of guardian, ensuring that he or she shares the values you want instilled in your children. You will also want to give consideration to the age and financial condition of a potential guardian. Some guardians may lack child-rearing skills you feel are necessary. If you fail to plan, the decision as to who will manage your finances and raise your children will be left to a court of law. 
 
Another issue to consider during the planning process is whether you’d like your beneficiaries to receive your assets directly, or to have the assets placed in trust and distributed subject to conditions and circumstances such as age, need and even incentives based on behavior and education. All too often, children receive substantial assets before they are mature enough to handle them in a prudent manner.
 
Planning for Death Taxes
The IRS will want to review your estate at death to ensure you don’t owe them that one final tax: the federal estate tax. Whether there will be any tax owed depends on the size of your estate and how your estate plan is structured. Many states have their own separate estate and inheritance taxes that you need to be aware of. There are many effective strategies that can be implemented to reduce or eliminate death taxes, but you must start the planning process early in order to properly implement many of these strategies.
 
Charitable Bequests – Planned Giving
Do you want to benefit a charitable organization or cause?  Your estate plan can provide support for such organizations in a variety of ways, either during your lifetime or at your death. Depending on how your planned giving is set up, it may also allow you to receive a stream of income for life, earn higher investment yield, or reduce your capital gains or estate taxes.
 
A well-crafted estate plan should provide for your loved ones in an effective and efficient manner by avoiding guardianship during your lifetime, probate at death, estate taxes and unnecessary delays. You should consult a qualified estate planning attorney to review your family and financial situation, your goals and explain the various options available to you.  Once your estate plan is in place, you will have peace of mind knowing that you have provided for yourself and your family.

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<![CDATA[Business Law]]>Fri, 15 May 2015 03:05:46 GMThttp://arizmendilawfirm.com/2/post/2015/05/business-law-overview.htmlOur 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
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<![CDATA[Limited Liability Partnerships]]>Thu, 07 May 2015 23:11:57 GMThttp://arizmendilawfirm.com/2/post/2015/05/limited-liability-partnerships.htmlLimited 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.

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<![CDATA[Corporations]]>Thu, 07 May 2015 04:39:36 GMThttp://arizmendilawfirm.com/2/post/2015/05/corporations.htmlCORPORATIONS
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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<![CDATA[What is Asset Protection?]]>Thu, 07 May 2015 03:42:31 GMThttp://arizmendilawfirm.com/2/post/2015/05/what-is-asset-protection.htmlPicture
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.


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