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Enhanced Life Estate Deed

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Sometimes referred to as the Ladybird Deed, an Enhanced Life Estate Deed is a method of transferring real estate without probate. Upon the owner’s death, the property passes to the beneficiary named in the deed through operation of law, which means it does not invoke probate.

An Enhanced Life Estate Deed differs from the typical life estate deed as the property is transferred at death, not before. This means the owner or “life tenant” retains complete control over their property while alive. The life tenant can sell, mortgage, and profit off of their property without having to consult the beneficiary.

What Is An Enhanced Life Estate Deed?

An enhanced life estate deed is a method of transferring real estate to a beneficiary after your death. Sometimes called a “Lady Bird Deed,” enhanced life estate deeds provide a number of benefits that can make them preferable to a typical life estate deed. For individuals interested in maintaining property rights and Medicaid eligibility, while preventing their beneficiaries from paying excess fees, an enhanced life estate deed may be for you.

Avoid Probate

Distributing your property through an enhanced life estate deed can allow you to avoid probate. Probate is the legal process of the management of assets after the owner’s death. Probate ensures assets go to the correct inheritors and also ensures debts and taxes involved with the process are paid in full.

Enhanced life estate deeds allow you to avoid probate by naming a beneficiary that the property is being transferred to. This is beneficial because it allows the beneficiary to avoid court fees associated with probate as well as possibly letting you avoid estate tax.

Retain Property Rights

Using an enhanced life estate deed allows you to retain several property rights. With a typical life estate deed, you lose out on several rights when you name a beneficiary. For example, while you would still be allowed to live on the property, you would not have the right to mortgage or sell the property. In extreme cases where the value of the property greatly decreased while you still owned it, you could even be liable to your beneficiary.

Enhanced life estate deeds avoid these issues. Like typical life estate deeds, you can continue to live on your property but you retain various property rights. For example, with an enhanced life estate deed, you retain the right to sell the property at any point before your death and can continue to profit off of the property during your lifetime.

Avoid Gift Tax

Naming a beneficiary with an enhanced life estate deed allows you to avoid the gift tax. When you give someone property, the gift giver is responsible for paying a gift tax based on the worth of the property. However, this only applies when the giver is alive during the gift process.

Enhanced life estate deeds name a beneficiary before the property owner’s death, but retain ownership of the property during their lifetime. It is only upon the death of the property owner that the beneficiary receives ownership. Because the exchange of property happens after the original owner’s death, property received through enhanced life estate deeds are not subject to the gift tax.

Preserve Medicaid Eligibility

Enhanced life estate deeds allow property owners to retain eligibility for Medicaid. When applying for Medicaid, individuals have to report their assets to determine whether or not they are responsible for paying for their own medical care. One method of getting around this, is by giving away valuable assets to family members. This allows the individual to qualify for Medicaid while still retaining access to the assets they’ve given away. To counteract this, Medicaid applicants must disclose assets they’ve given away during a time period referred to as the “look-back” period.

Enhanced life estate deeds avoid this issue as the property remains in the original owner’s possession until death. Thus, enhanced life estate deeds do not need to be disclosed when applying for Medicaid. For states that don’t consider the value of your residence when applying for Medicaid, using an enhanced life estate deed keeps you eligible for Medicaid.

Avoid Medicaid Repayment

An enhanced life estate deed can help your family members avoid Medicaid repayment. In instances where an individual uses Medicaid, family members can be liable to repay Medicaid costs with the assets they inherited. However, in certain states, assets that did not go through probate are not applicable for this repayment process.

Enhanced life estate deeds prevent your inheritors from repaying Medicaid costs because the property did not go through probate.

An enhanced life estate deed is a simple way to transfer real estate while avoiding probate and preserving eligibility for Medicaid. This method is ideal for individuals who want to retain property rights for the remainder of their lifespan without being beholden to their beneficiaries.

For more information on enhanced life estate deeds, contact us today.

The benefits of Enhanced Life Estate Deeds include:

  • Medicaid eligibility is not affected by an Enhanced Life Estate Deed because you still retain ownership of the property. Likewise, because you own the property you avoid Medicaid’s look-back rule.
  • Medicaid’s right to estate recovery is diminished because in some cases, only properties that were exchanged with probate qualify to repay Medicaid expenses. This means the beneficiaries will not be at risk of having to sell the property to repay the expenses.
  • The gift task is also avoided as the property is given in death, not life.

Understanding Enhanced Life Estate Deeds and how they work in your state can be a difficult process. For assistance and answers in establishing your Enhanced Life Estate Deed, contact us today.

Living Trust

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Living Trust Key Terms

  • Trust:
    • A Financial structure that contains money and assets
    • Must be managed by trustees according to founding documents and terms
  • Revocable vs Irrevocable:
    • Revocable – Trust whose assets and terms can be managed and changed
    • Irrevocable – Trust whose assets and terms are permanent after creation
  • Trust Grantor, Trust Settler:
    • The person who establishes the trust
    • Default beneficiary of the trust
  • Trustee:
    • The person who controls the trust according to founding documents and terms

Living trusts are an important tool to being prepared for the future. A Trust is a legal vehicle that allows for different options for managing assets. It is a fiduciary arrangement where assets are held for one party (the beneficiary) and managed by a different party (the trustee).

The main benefit of a Living Trust is its flexibility. Living Trusts can be arranged in many different ways, can hold different types of assets, and can come with different types of conditions. For example, the creator of a Trust can designate the age at which the beneficiary will receive all the assets in the Living Trust. Until that age, access to the assets will be managed by the trustee.

The benefits of a Living Trust include:

  • The articles of Living Trust helps avoid Probate. This means any asset in a Trust is likely to be accessible by the Successor trustee or beneficiary more quickly than if the same assets were transferred using a Will. Avoiding probate also means savings in court fees and added privacy, as probate is a matter of public record.
  • Living Trusts allow you to plan for the future of your assets while still giving you control during your lifetime. A Revocable Trust allows the owner of the assets to continue to access them during their lifetime while also specifically designating who, and under what circumstances, may receive the assets after the owner’s death.

While one of the main benefits of a Living Trust is its flexibility, this also means it presents a number of important questions and considerations while being created. Contact us now for assistance with establishing your Living Trust.

In our LT you will receive the Articles of Trust, Pour Over Will, and 2 Powers of Attorney – one for health and one for finance.

The Importance of a Revocable Trust

When building a living trust, it’s vital to remember that it must be revocable to continue to be managed by you or others outside of the founding documents. An irrevocable trust cannot be changed or altered after it is made. These are useful for all sorts of predetermined asset distribution styles, like setting aside college money or a wedding fund for your children or ensuring continued donations to a specific charity.  

However, most people look for living trusts in estate planning and asset management to be revocable. A revocable trust is more like a financial storage container, where you are able to place new assets, retrieve stored assets, and “change the locks” whenever the need arises during your lifetime. At the same time, a revocable living trust can be managed by you or any appointed trustee according to the terms established to govern the trust.  

By default, you should look for a revocable living trust. Irrevocable living trusts are chosen only when the circumstances are intended to create a permanent asset management or distribution structure.  

Ways to Use a Living Trust

Estate Planning

Living trusts are most often used in estate planning as a way to more smoothly direct the transference of property after the grantor’s death. Personal assets put into a living trust are not part of the will and are not subject to probate. For example, a home placed into a trust, with a surviving spouse set as the trustee, will pass smoothly into the ownership of that spouse without having to wait months for probate to allow them to legally and financially take over expenses.  

A living trust can be used much like a will to hold personal items and then distribute them according to set terms. You can use a living trust to send family heirlooms to relatives, to distribute your financial assets fairly after death, and even to support causes and organizations once the grantor passes on.  

Asset Management

Living trusts are also useful for legal asset management. Some assets may be too large to comfortably own personally, and some assets may be so important that they warrant a separate financial management strategy. Artwork and real estate are among the two most commonly protected assets through living trusts. A living trust allows the assets to become financially separate from the grantor and to be given their own set of rules for management, upkeep, and ownership.  

Family Future Plans

Finally, living trusts are often used to help wealthy patriarchs and matriarchs plan for a family future. A trust may be part of your child-rearing policy or granting your offspring trusteeship of some assets may be a way to prepare them for future success. A trust can be used to put away assets for a child’s future, provide a rainy-day fund for future family emergencies, and hold important family keepsakes until the rightful inheritors are ready.  

*Sources
Living Trust by Will Kenton for Investopedia
9 Reasons Why You Should Consider A Living Trust by Christine Fletcher for Forbes  

Wills

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A Will is one of the most essential items you can prepare for your family and yourself. Without one, after you pass away, your assets will be distributed according to the state law and not in accordance with your wants and wishes. Preparing a will ahead of time will not only legally protect your family, including your spouse and children, but your belongings and assets as well. The process does not need to take hours or be challenging to complete; in fact, all you need to do is dictate how you would like things handled after you are gone. With the help of a Legal Docs by ME representative, we will ensure your family’s future is taken care of. 

Having a well-thought out Will provides security and peace of mind for you and your family. A Will ensures that your assets are distributed and affairs are handled according to your desires after death.  Without a Will, assets will be distributed to beneficiaries according to the intestacy laws of your state of residency. 

A Will generally includes:

  • Designation of an executor who will be responsible for carrying out the provisions of the Will
  • Beneficiaries, who are the individuals or entities inheriting assets
  • Instructions for when and how assets should be distributed to beneficiaries
  • Guardians for any minor children

Some assets may already have beneficiaries associated with them, separate and apart from Wills.  A common example of this is a life insurance policy, where a beneficiary is often named at the time the policy is created.  Other assets, however, do not have stated beneficiaries, such as physical property.  

Wills generally are subject to probate, a legal process for settling an estate.  The probate requirements will vary by state.

Accomplish Your Goals With a Will

When appropriately drafted a Will can ensure that you are prepared for almost any contingency of asset transfer after death.  Wills can include distribution of all your assets, from jewelry to retirement accounts to the family home.  

Ensuring your estate is in order can provide great peace of mind for you and your family.  Contact us now for assistance.

Benefits of a Will Preparation Services

Even though each person’s situation and wishes are unique, having a Will preparation service can be extremely beneficial to all:

  • The Personal Guidance You Need: With our Will preparation services, you will be able to receive the guidance you need to ensure your estate is handled in the way you want upon your death. We will make sure your Will is drafted correctly and that it covers almost any contingency of asset transfer after your death, including the distribution of your retirement accounts, your home, and even your jewelry.
  • Easy Access: Being able to prepare your Will over the phone allows every Beneficiary to easily and quickly draft their Will without the assistance of an attorney. By answering some straightforward questions, the Beneficiary will have a valid and legal Will ready to sign in no time.
  • Available When You Need: With our services, Beneficiaries have the power to access our Will services at any time they wish. As life continually changes with divorce, births, and other situations that can make you want to updates your Will, Legal Docs by ME, you will be able to change your Will whenever you find it necessary.

How to Write A Will Without a Lawyer

When individuals decide they want to create a Will, they assume they need the help of an experienced and expensive lawyer to get the job done. However, it does not need to be complicated. Keep the following in mind when you draft the contents of your will:

  1. Create an Outline of the Basic Will Document
  2. Include the Specific Required Language
  3. Make sure to List your Immediate Relatives
  4. Indicate the Name of the Guardian
  5. Decide on an Executor
  6. Name the Specific Beneficiaries
  7. Allocate the Estate Remainder
  8. Finally, Make Sure to Sign the Will
  9. Put The Will Away in a Safe Place

The following is just a general breakdown of what is required for you to create a Will. However, our team at Legal Docs by ME will ensure that the process is not only quick and simple, but devised in a way that it is easily understandable. Executing a Will does not have to be stressful or require the help of a lawyer. If you want to make sure your estate is in order, contact Legal Docs by ME today! Let us help craft your wishes and desires into the legal document that you want.

Sources

What is a Will and Why Do I Need One Now? By Lisa Smith for Investopedia
10 Things You Should Know About Writing a Will By Brett Widness for AARP   

Medical Power of Attorney

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A Power of Attorney is a legal document that allows another person to act on your behalf. Acting under a Power of Attorney, the individual designated to act on your behalf is your agent.

One common use for Power of Attorney is to designate an agent to handle an individual’s medical decisions.

Purpose of a Medical Power of Attorney

A Medical Power of Attorney, or commonly known as Advance Healthcare Directive, designates an agent and an alternate agent to make medical decisions on your behalf.  The document can be tailored to suit an individual’s needs, including specifying end of life choices and preferences for certain procedures while still capable.

Medical Power of Attorney Requirements

There are a number of requirements for a Medical Power of Attorney to be considered valid.

  • You must be of legal age and mentally competent;
  • The Power of Attorney is notarized, or witnessed.

A  Medical Power of Attorney can be a versatile and powerful document, ensuring that your medical matters are handled in accordance with your wishes.  We are happy to provide you assistance in creating the best document to suit your needs.

What Is A Medical Power of Attorney?

A medical power of attorney is an advance directive that allows an individual to name a zzz another individual that has the authority to make treatment decisions on the other’s behalf. Once the medical power of attorney has been established, the secondary individual, also known as an attorney in fact or health agent, can make treatment decisions only if the patient is unable to do so. For a medical power of attorney to be valid, the individual must be of legal age and mentally competent and the document must be notarized or witnessed. 

Without a medical power of attorney, only a medical professional can make decisions on behalf of the patient.

When Do You Need A Medical Power of Attorney?

Anticipating a future where you will need to establish a medical power of attorney is unpleasant. Because medical power of attorney is only necessary in situations where an individual is unable to communicate or is unfit to make decisions for themselves, concerned parties should consider several aspects of their lifestyle before committing.

Genetic History

As we age, our bodies and minds begin to fail us. For some, this could necessitate a medical power of attorney. Consider your personal genetic history and what conditions are common throughout your family. If you are at risk for Alzheimer’s or other diseases that impact cognitive function, it may be wise to look into medical power of attorney before you start experiencing symptoms. 

Dangerous Jobs

Careers that require employees to work around dangerous equipment or otherwise unsafe conditions can result in injury. If you believe it is possible that an injury on the job could result in paralysis, coma, or another form of incapacitation, establishing a health agent ahead of time can grant you peace of mind. 

In Case of Accident

For some individuals, it may be beneficial to establish a medical power of attorney without being at risk for disease or injury. Heads of households for example, may want to establish a health agent in case of an accident who can act with the interests of the household in mind. If finance plays any part in deciding on treatment, assigning a spouse or another financial contributor to the household is wise.

Who Should I Name My Health Care Agent?

The only requirement of a health care agent is that they be of legal age. Once this requirement has been met, it is a matter of personal preference of who should be your health care agent. 

It’s recommended that your health care agent understands your moral and religious values, so they can choose treatment that aligns with these ideals. Likewise, your agent should be willing to follow your wishes, even if they contradict with their own. Finally, your health care agent should be able to handle stress, and make tough decisions if a situation where full recovery is impossible arises. 

Does A Spouse Automatically Have A Medical Power of Attorney?

A spouse does not automatically have a medical power of attorney. Despite being married to the individual, a spouse still requires legal written authority from the individual to make treatment decisions on their behalf. In the state of California, an advance health care directive is required for a spouse to acquire medical power of attorney.

Can A Medical Power of Attorney Override a Living Will?

A medical power of attorney cannot override a living will. If a living will and a medical power of attorney exist simultaneously, the living will takes precedent. However, the designated health agent can make decisions for the patient, if the situation is not stipulated in the living will. Essentially, the process requires the living will to be followed first, with medical power of attorney becoming applicable when the living will has not stipulated a directive. 

How to Get A Medical Power of Attorney

To assign a health agent, a durable medical power of attorney form must be filled out and signed. Additionally, the document must be notarized or witnessed and the individual must be of legal age and mentally competentant.
Establishing a medical power of attorney can be an intimidating and daunting process. Contact the experts at Legal Docs by ME for information and assistance.

Sources

https://healthy.kaiserpermanente.org/health-wellness/health-encyclopedia/he.learning-about-medical-power-of-attorney.zx4035
https://www.stimmel-law.com/en/articles/durable-power-attorney-health-care-california-law-and-form

Financial Power of Attorney

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Power of attorney refers to a legal document that grants an agent the legal right to make decisions on behalf of another individual. The individual in question chooses the agent ahead of time and grants them this power, often in case of emergency or accident. One form of power of attorney is a financial power of attorney.

What is a Financial Power of Attorney?

A financial power of attorney is a legal document that allows another person, an agent, to make financial decisions on your behalf if you are unable. An agent can also help you execute a financial transaction if you will not be available – such as authorizing an agent to sign real estate paperwork.

What Does a Financial Powerof Attorney Do?

Financial power of attorney essentially allows someone else to make financial decisions on behalf of the signer. Financial power of attorney is often reduced to situations where the person in question is mentally unable to make financial decisions. This can be due to an injury, disability, or other circumstances. It should be noted that this only stands while the individual is considered unfit. Once they recover, the agent no longer has authority to make decisions on their behalf.

However, financial power of attorney can also be granted so an individual has a representative capable of signing financial documentation without having to be physically present. For example, someone with limited mobility or someone who frequently travels abroad could both benefit from having someone act as their financial agent. In cases like this, the agent is acting with knowing approval from the individual in question, and is merely acting as a stand in. This is also common between married couples. 

Another misconception about financial power of attorney is that an agent has complete control over the financial affairs of the signer. This is not true. A financial power of attorney lays out the exact situations and guidelines the agent has to follow. If something is not stipulated in the power of attorney, the agent cannot act on behalf of the signer. 

For example, a financial power of attorney may grant an agent the power to pay bills and medical costs on behalf of the signer, but not allow the agent to make financial decisions regarding property investment or inheritance. This protects the signer’s assets and assures that their agent acts in good faith.

Does Financial Power of Attorney Override a Spouse? 

Spouses often share finances and have equal say in making joint financial decisions. However, marriage does not automatically grant financial power of attorney. If a husband were to establish a financial power of attorney and became unfit, the financial agent would have jurisdiction over financial decisions made on his behalf. 

Spouses should discuss their financial wishes ahead of time and establish if they would ever want to establish a financial power of attorney. In the case of a husband and wife deciding to grant each the right to make financial decisions, a formal financial power of attorney should be filed. This will prevent any legal confusion later on and ensure that a spouse will not be challenged when acting on behalf of an unfit partner. 

What is Durable Financial Power of Attorney?

Durable financial power of attorney refers exclusively to situations where an agent is making decisions on behalf of an unfit individual. This is often the most commonly known form of power of attorney. The “durable” aspect of the name represents the possible longevity of this type of power of attorney. As long as the signer is considered unfit or incapable of making financial decisions, the durable financial power of attorney will act on their behalf. 

How Do I Get a Financial Power of Attorney?

To assign a financial agent, a financial power of attorney form must be filled out and signed. Additionally, the document must be notarized or witnessed and the individual must be of legal age and mentally competentant.

How Do I End a Financial Power of Attorney?

In cases where an individual wishes to revoke financial power of attorney, such as divorce or an agent that no longer wishes to represent the signer, financial power of attorney can be revoked. A revocation of power of attorney form will be needed that includes information like your name and the date of filing, a declaration that you are mentally fit, a request for removal along with the name of your agent, and your signature.

For family members looking to end a financial power of attorney, the process becomes more complicated. In situations where the signer is unfit, but the family wants to end or change financial power of attorney, they must prove before a court that the current financial agent is not acting in the signer’s best interest.

A financial power of attorney can be a versatile and powerful document. You can ensure that your financial matters are handled expeditiously and in accordance with your wishes.  Contact the experts at Legal Docs by ME for information and assistance.

 Sources

Financial Power of Attorney by Adam Hayes for Investopedia

Property Deeds

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Maintaining up to date records detailing our assets is imperative for proving legal ownership. In the case of property, a property deed is necessary to prove legal ownership of a property. 

What Is a Property Deed?

A property deed is the legal mechanism used to convey real property (land and the property attached to it) from a seller to a buyer.  Issues related to property purchase and transfer can be quite complicated, and property deeds are no exception. There are several types of deeds and specific requirements for transfer.

Types of Property Deeds

The most common classification for Property Deeds is based on the type of title warranty transferred via the Property Deed.  These include:

  • General Warranty Deed
    This type of Property Deed is the most protective to the buyer. The seller must provide legally binding assurances to the buyer that it will protect the buyer from prior claims as they relate to the conveyed property.

  • Special Warranty Deed
    This Property Deed type provides more limited warranty due to the timeframe it covers and is therefore less protective of the buyer.  Under this Deed, the seller only warrants the buyer against defects that arose while the seller was the property owner.

  • Quitclaim Deed
    This is akin to a Non-Warranty Deed and is most protective to the seller who makes no promises or warranties regarding the quality of the title.  It simply conveys whatever interest the seller has in the title.  If it were to be discovered that the seller did not actually receive title to the property (and therefore had no right to transfer title), there is no recourse for the buyer.

  • Special Purpose Deed
    A special purpose deed occurs in circumstances where the transfer of property is not the result of exchanging currency with the owner for the property title. For example, situations involving the possessions of a dead individual would utilize a special purpose deed. A number of special purpose deeds commonly used in connection with court proceedings.

What Does a Property Deed Look Like?

A property deed doesn’t have a singular appearance. However, valid property deeds need some basic information to prove purchase and legitimacy.

A property deed must contain a legal description of the property. This is to ensure that the property you have purchased is the same property you are holding a deed for. Additionally the deed needs to be signed by the seller. The seller’s signature acknowledges that they no longer own the property and that they have been compensated for transferring ownership to the buyer. The sum of money exchanged for the property should also be present. 

How to Get a Property Deed

After purchasing a property, the property deed should either be given to you in person, or delivered to you by mail. If you have somehow lost or damaged your property deed, a copy can be purchased for a small fee.

How to Get a Copy of a Property Deed

In the event of you needing additional copies of a property deed, copies can be purchased from a recorder office. It is important that you contact the recorder office that has jurisdiction over your property, as any other recorder office will not have access to the property deed. Some offices even offer online records of property deeds that you can print in your own home. If your deed has not been filed with the recorder office, you can also try contacting a digital deed recovery service.

Requirements to Transfer a Property Deed

There is no standard form required for documenting a property deed, but it must be in writing.  Each party involved in the conveyance must be legally capable of entering into the transaction, for example, it cannot be a minor.  The property deed must describe the property, identify the buyer and seller, and be signed and notarized by all the owners of the property.

How to Transfer a Property Deed

Transferring a property deed can be extremely straightforward or extremely complex depending on the nature of the property. The basic steps of transferring a property deed are as follows. First, the current owner needs to choose the new recipient of the deed and discuss the terms of the transfer. Once that has been decided on, the owner files a change of ownership form and alters the deed title. A real estate attorney then prepares the deed for notary and filing. One the deed has been notarized and filed, the transfer is official. 

Looking to buy or sell real estate? Contact the experts at Legal Docs by ME for information and assistance regarding property deeds and transferences.

Sources

Understanding Property Deeds by Jean Folger for Investopedia
Transferring Property Ownership to Family, Charity, and More at American Financing

Divorce Papers

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There is no doubt that divorce is a stressful and uncertain time for individuals.  For some, it can be made even more stressful by dealing with the administrative burdens that accompany Divorce Papers.

How Will You Approach Divorce Papers?

Depending on the relationship between the parties seeking a divorce, they may approach the process in different ways.  Some individuals may decide to approach Divorce Papers collaboratively, agreeing on division of assets and any parenting plan without the intervention of a judge – and often without attorneys.  Other relationships may be more contentious and may require appearing before a judge to help resolve disputes. 

Different states also have different requirements for Divorce Papers, such as required periods of separation.  Be sure to understand your state’s requirements as you begin the process.

What Do Divorce Papers Look Like?

Every marriage is different, which means every set of divorce papers will be slightly different depending on the terms of the marriage. For almost all marriages, divorce papers will include these three documents.

  • Dissolution of Marriage Form
    This document will be filed with the court to formally request the Divorce. Some states may require that a reason for dissolution be included.  The spouse who does not file the form will be served.
  • Proof of Financials
    A variety of financial paperwork, including tax returns, bank statements, retirement account statements, mortgage statements, and bills.
  • Parenting Plan
    If there are children from the marriage, a parenting plan will be created.  This plan will detail all the pertinent details related to raising the children, including how financial responsibilities will be shared, when they will spend time with each parent, and any other provision that is important to the parents, for example involvement in extracurricular activities, schooling, medical care, and religion.
  • Settlement Agreement
    This will be the official document provided from the court detailing the final arrangements, especially as it pertains to finances and custody. This document will be legally binding and must be followed.

Where to Get Divorce Papers

To obtain divorce papers, a spouse must contact a local courthouse, either by mail or in person and request the documents. It’s important to obtain divorce papers in the state you currently reside in, not the state you were married in. Procedure can differ depending on states, and keeping the process as simple as possible can prevent future conflict. 

How to Get Divorce Papers

A dissolution of marriage form can be obtained from a courthouse either in person or through the mail. Many cities offer dissolution of marriage forms on their website for even easier access. Proof of financials can be obtained by gathering past financial statements for review. If you find you don’t have records of the needed financial statements, contact your financial institution and ask for the relevant documentation. You will receive your settlement agreement from the court itself after the conditions of the divorce are finalized. 

How to Serve Divorce Papers

Divorce papers can be served in two ways. The spouse filing for divorce can serve the papers in person along with the documents used to respond to the dissolution of marriage form, or the spouse can mail the forms using an adult age third party.

In the case of serving by mail, the served party will have to sign a document called a Notice and Acknowledgment of Receipt. This proves that they both understand the nature of the documents and that the documents have been received. In the state of California, the served party has 20 days to return the signed documentation.

How to Get a Copy of Divorce Papers

Getting additional copies of your divorce papers requires contacting the County Superior Court that granted your divorce. As all the documentation that was provided for the divorce proceedings is on file, you can request copies of any or all of these documents. You will be required to pay a fee to obtain copies, and this price can vary depending on the amount of documentation you request. 

How Much Do Divorce Papers Cost

In the state of California, simply filing divorce papers costs around $435. Additional fees may be applied depending on your county or other complications regarding the divorce. Hiring a lawyer to modify or draft other aspects of your divorce papers can cause costs to greatly increase. 
Filing for divorce can be an overwhelming financial and legal process. Contact the experts at Legal Docs by ME for information and assistance.

Sources


The California Divorce Process in Ten Steps at the Law Office of Cristin M. Lowe
How much does a divorce cost in California? by Moriel Berger for it’s over easy

Business Incorporation

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If you are starting a new business, and decide to create a corporation, your business will be a legal “person” under the eyes of the law.  Among the ways it will be treated as a person are that it can be named in a lawsuit, own property, and be taxed.

What are the Benefits of a Business Incorporation?

Two of the primary considerations when deciding whether to incorporate are the treatment of taxes and liabilities:

  • Taxes: Unlike a partnership, taxes do not flow through to the owners of a corporation.  Instead, the corporation is taxed based on its profits
  • Liabilities: Because the corporation exists as an entity separate and apart from the owners, owners are protected from personal liability for any obligations of the corporation. Instead, if the corporation is found liable for any debt or obligation, that liability can only be satisfied from the corporation’s assets.

Additional advantages of Business Incorporation include:

  • Established federal and state legal precedent as to the treatment of the entity;
  • Ease of raising capital through the sale of securities
  • Unlimited life
  • Straightforward transfer of ownership through transfer of shares.

While Business Incorporation comes with many benefits, there are also some drawbacks to consider, including:

  • Increased administrative burden of running the company, including holding annual meetings;
  • More expensive to create; and
  • Additional paperwork and filings required with the state, including annual fees.

Missing even a small detail in your filing can slow down the Business Incorporation process and cost additional expenses.  Contact us now to find out how we can assist with your Business Incorporation.

LLC

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A limited liability company (LLC) is the American form of a private limited company. An LLC combines elements of a partnership and a corporation. LLCs allow for greater liability protection without the complexities of a traditional corporation.

The basic structure of LLC formation is:

  • Owners have limited liability for the entity’s debts and obligations, similar to a corporation; and
  • Income or losses from the business are passed through to the owners, similar to a Partnership.

Distinguishing Elements of LLC Formation

An LLC sets itself apart from a partnership in the following ways:

  • A formal document, often called articles of organization, are filed in the state where the LLC is incorporated; and
  • Owners of an LLC are not personally liable for the debts and obligations of the entity.

It is different from a corporation in the following ways:

  • Profits and losses flow through to the owners, the entity is not taxed; and
  • It lacks shareholders and has less administrative requirements than a corporation; and
  • It does not have an unlimited life in most jurisdictions and may need to be dissolved upon the death of an owner.

What are LLC Formation Documents?

When forming an LLC, there are several documents that you will need to fill out and file. The first document is the articles of organization. This document will state the basic information regarding your LLC such as name and purpose. An operating agreement is an optional document that will outline how your LLC will be run. Finally, after successfully forming your LLC you will receive a certificate of formation. 

What is a Certificate of Formation for an LLC?

Essentially, a certification of formation for an LLC is a receipt that proves your LLC has been legally recognized and registered by your state. Receiving a certificate of formation also demonstrates the proper forms and procedures have been filed and followed. This document will mark the official creation of your LLC for future legal records. 

Do It Yourself LLC Formation

Starting an LLC requires several distinct steps and levels of verification.

  1. Choosing A Name
    The first step in understanding how to start an LLC is choosing a name. This may sound simple, but different states have different requirements and restrictions. Before you have your heart set on a name, it’s important to familiarize yourself with these state specifications as well as the already existing business names.

    Choosing a unique name is a way to ensure your business isn’t confused with others in its field. Likewise, you should consider branding and marketing options when you choose your name. If you want to utilize a website domain, make sure the domain is available before you register your business. Additionally, you have the option of reserving your LLC name if you don’t intend to act on it right away.
  2. Choosing a Registered Agent
    A registered agent is a necessary part of starting an LLC. Essentially, a registered agent receives legal documents meant for the LLC and then distributes them to the proper personnel at the LLC. A member of the LLC can fill the role of registered agent but there are also businesses that can provide this service if that is more agreeable.
  3. Creating an LLC Operating Document
    An LLC operating document defines how the LLC will be run. Rather than covering daily operations, the LLC operating document covers big picture issues and how they are settled between the various members. Issues like how to handle partner death, going out of business, voting, or the allotment of profits and losses.

    This is not a legal requirement, but is a good way to state precedent before various issues arise down the road.
  4. Choosing a Management Style
    There are two management styles for running an LLC: member or manager. Member management is used with smaller LLCs. Because the number of members is smaller, the members can collectively make decisions for the LLC. For larger LLCs or LLC members who want to be less involved with the LLC, a manager or managers can be chosen instead. Like registered agents, there is no requirement for a manager to be part of the LLC.

    Choosing the right management style is important when big decisions need to be made down the line. Consider the types of conflicts or situations that frequently come up in your industry and what management style would be best for handling those circumstances. What kind of financial decisions would management need to make? What about industry strategy or goals? These kinds of questions should help you decide which management style is best.
     
  5. Filing the Articles of Organization with the State
    The articles of organization list basic information to be filed with the state. These typically include information such as the name of your LLC and its address, its purpose and length of existence, as well as the name and address of the registered agent.

    The articles must be signed by the individual forming the LLC and in some cases by the registered agent as well. Filing the articles will cost a small fee.

    The LLC will then be issued a certificate by the state that permits the creation of the LLC. After this, the LLC has formal permission to begin running as a business.

Doing Business in Other States

If you intend for your LLC to operate in multiple states, more paperwork must be filed that registers the LLC within each state it will be operating in. It should be noted that each individual state will require a new registered agent located in that state.

Forming an LLC can be a confusing process. While this is a general guide to follow, the differences in LLC formation in each state can make research and proper procedure difficult to follow. For additional help and questions about filing your own LLC, contact us today.

Sources

How to Form an LLC by Diana Fitzpatrick, J.D. for NOLO

How to Start an LLC by Geoff Williams for U.S. News and World Report

Legal Agreements

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Whether in your personal life or as part of business or work, you have probably entered into a binding legal agreement. When entering into a legally binding contract, it is important to understand how the agreement process works to ensure your obligations and expectations are appropriately documented.

What is a Legal Agreement?

A legal agreement is a method of formally stating and recording the terms of an agreement between two or more parties. If the agreement is legally binding, participants are legally required to obey the stipulations listed in the agreement. This is useful because it allows participants to take legal action if they do receive what was promised.

What Makes a Legal Agreement Binding?

Whether you want to ensure a third party is bound to their promises, or you want to be wary of what you are committing to, it is important to understand when a legal agreement is binding.  Contract laws govern when a legal agreement is binding, and they generally require:

  • Offer and Acceptance: There needs to be a clear offer made by one party and unambiguous acceptance by the other party.
  • Consideration: Something of value (consideration) must be exchanged between the parties.
  • Signature: Some types of agreements may require a signature.

Failure to ensure any one of the required elements of an agreement is in place can result in an agreement that is not enforceable.

How Do You Write a Legal Agreement?

There are several steps that should be followed when drawing up a legal agreement. Your first order of business should be to ensure that the requirements listed above (offer/acceptance, consideration, and signature) are met. Other aspects of a legal agreement may or may not apply, so carefully consider if you need the following when typing your own legal agreement.

Identify All Involved Parties

To avoid any future confusion, explicitly name all parties involved with the legal agreement. Full names and titles of individuals (or companies) should be listed, as well as any other identifying information. Simply referring to a party as John Smith leaves room for ambiguity. Referring to a party as John H. Smith, CEO of Corporation operating out of Nevada is much more specific, and harder to contest the identity of the individual.

Define Terms

Make sure that your legal agreement states exactly what each party is giving and receiving in detail. Adhering to this ensures that the document reflects what is being offered and what is being accepted. This prevents parties from disputing terms later on. For example, if someone wants to sell or buy a property, they may have the property appraised so they understand its monetary value. Including a description of the property and it’s appraised value helps to define the terms of the agreement and keeps all parties equally informed.

Decide What Ends the Contract

For ongoing legal agreements, such as a hiring or renting agreement, it is wise to include stipulations that end the agreement. For example, if a renter signed a legal agreement that they would not keep pets in their apartment, a landlord could instantly end the agreement if they acquired proof the renter was keeping a dog. This can also apply to one time transactional agreements, but the circumstances tend to be more complicated and often require one party to keep tabs on the other to ensure compliance.

Conflict Resolution

Ongoing legal agreements also benefit from including a section on conflict resolution. Conflict resolution may be required if parties want to contest aspects of the legal agreement, or if they believe interpretation is ambiguous. Establishing a process for resolving conflict like this helps to keep any disputes civil and gives the parties a procedure to rely on.

Hire a Notary or Witness

Not all legal agreements require the presence of a notary or witness, but they can be a helpful way to establish the legitimacy of a document. For example, a witness can testify that both parties willingly signed the agreement, while a notary will have a formal record of the signing of the agreement. This prevents one party from claiming fraud or forgery regarding their acceptance of the agreement.

Types of Legal Agreements

While it would be impossible to name every variation of agreement, some information about common forms of agreement are included below:

  • Non-Disclosure/Confidentiality Agreement: Helps protect confidential information.
  • Entertainment Contract: Specify actions to be performed by a performer and conditions pertaining their performance.
  • Employment Agreement: Sets the terms of an individual’s employment; similar agreements include independent contractor agreements and non-compete agreements
  • Licensing Agreement: Allows a third party to use intellectual property, often for payment of a royalty or other fee
  • Lease Agreement: Establishes the rental terms between a tenant and landlord
  • Promissory Note: Memorializes the terms around a loan, including repayment, interest, and penalties
  • Bill of Sale: Documents the sale of personal property
  • Purchase Order: Commitment to purchase items at an agreed upon price point
  • Agency Agreement: Establishes the job scope and payment terms for an agency
  • Franchise Agreement: Outlines the relationship and terms between a franchisor and franchisee
  • Settlement Agreement: Documents the agreement between the two parties to resolve a dispute

No matter the type of legal agreement, it is likely to include a variety of terms, including indemnification, warranty, choice of law, and many more.  To ensure the most favorable terms are included in your legal agreement, contact us today.

Sources

Ten Tips for Making Solid Business Agreements and Contracts by Bethany K. Laurence for Nolo
How Do You Know if You Have a Legally Binding Agreement? By Eugenia Munoz for Legal Vision