Category: Article

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.

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

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

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

Partnership Agreements

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Owning and operating your own business can be exhausting. With only one person at the helm, you are ultimately responsible for every aspect of your business. One way to lighten the load and gain some assistance is to bring on a partner through a partnership agreement.

What is a Partnership Agreement?

A partnership agreement is a legal business operation between two or more individuals who share the management and profits of the business.  Any business that will be owned and operated by more than one individual can consider structuring the business as a partnership.

Types of Partnership Agreements

There are two main types of partnerships.

  • General Partnerships
    In this type of partnership, all partners are responsible for managing the company and taking responsibility for business debts and obligations.
  • Limited Partnerships
    In this type of partnership, there are individuals who run the business and have responsibility for debts and obligations (general partners) but there are also limited partners whose only stake in the business is monetary. Limited partners do not have control over how the business is operated and managed.  For this reason, the scope of their liabilities are different.

General partnerships are more straightforward.  Limited partnerships come with additional filing requirements and administrative demands.

Do You Need a Partnership Agreement?

There are many benefits to forming a partnership agreement. Consider the following pros and cons to see if your business could benefit from a partnership agreement.

Pros

One of the primary benefits to forming a partnership agreement is the tax treatment of the business. A partnership agreement is not subject to federal income tax. After partners calculate their partnership’s profits, each partner will file taxes for their share of the profit.

Cons

One concern for the partners in a partnership agreement is that their personal assets may be less protected from business liabilities. Generally, each partner has unlimited personal liability, and any debts incurred by the business are the responsibility of all partners.

For individuals who are concerned about the liability structure of general and limited partnerships, they could consider LLC formation. LLCs have similar tax benefits to partnerships but do not allow creditors to reach out to the pocketbooks of individual partners to satisfy debts.

How to Write a Partnership Agreement

A partnership agreement should include the following:

  • Name: The formal name of your partnership.
  • Contributions: What assets each partner brings to the business. 
  • Authority: States if partners can act without consulting other partners.
  • Management: During day to day operation, who is doing what?
  • Monetary Divisions: How profits, draws, and losses are distributed between partners.
  • Decision Making Process: How are business decisions made? Is there voting and if so, does it need to be unanimous?
  • Conflict Resolution: When partners disagree, what is the process for resolving and moving past disputes?
  • Additional Partners: The process for bringing on additional partners.
  • Removing Partners: The process for removing partners who want to leave or who have passed on.

Does a Partnership Agreement have to be in Writing?

A partnership agreement does not have to be in writing, but having a formal written version of the agreement is useful for navigating disputes or conflicts between partners. A written agreement does not require that you accurately remember all aspects of the agreement. 

What is a Strategic Partnership Agreement?

A strategic partnership agreement is a partnership formed between two businesses instead of two individuals. It’s important to note that the partnership is mutually beneficial, and may include the sharing of resources for the betterment of both parties.

Forming a partnership agreement requires preparing and filing appropriate documents. Contact us today to find out how we can help.

Sources

Creating a Partnership Agreement by Bethanky K. Laurence for Nolo
Which terms should be included in a partnership agreement? By Melissa Horton for Investopedia

Eviction Notice

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Eviction describes the action of a landlord or other property owner removing someone, normally a tenant from a property.  Evictions are also referred to as an unlawful detainer.

What is an Eviction Notice?

In order for a landlord to evict a tenant, they must first provide notice to the tenant.  The required amount and form of notice will vary depending on the state the property is located. The eviction notice informs the tenant that they are being evicted. If there is a method to prevent the eviction, such as paying rent in full, the eviction notice will specify how to stop the eviction.

What Does an Eviction Notice Look Like?

The four most common eviction notices are:

  • Pay Rent or Quit Notices: Used when a tenant has not paid rent and provides a set number of days in which they must move out.
  • Cure or Quit Notices: Used when a tenant violates a condition of the lease or rental agreement (ex. no pets clause). The tenant has a set amount of time to cure the violated condition or move out.
  • Unconditional Quit Notices: Used when there is no option to solve the situation. The tenant is not given an opportunity to pay or cure.  State requirements dictate when these notices may be used.
  • Month-to-Month Termination: If the tenant is in a month-to-month occupancy, the landlord must provide the statutorily mandated notice before terminating the tenancy.

If the tenant fails to vacate after the eviction notice is provided, the landlord must file a lawsuit to evict, called an unlawful detainer lawsuit.

If the unlawful detainer lawsuit is successful, the court will issue a judgment for possession of the property.  The judgment must be tendered to a local law enforcement officer who will inform the tenant that they must vacate.  If the tenant fails to do so, the officer must return to remove the tenant.

How to Write an Eviction Notice

In the event that a renter has violated some term of their lease, a landlord is entitled to serve them an eviction notice. An eviction notice needs to state several pieces of information

  1. Tenant’s Name and Address
    Used when a tenant has not paid rent and provides a set number of days in which they must move out.
  2. Original Date of Signed Lease
    The lease date acts as proof that the tenant was aware of the conditions of their tenancy as well as the causes or lease termination. This removes plausible deniability from the tenant’s side.
  3. Date the Notice is Served
    By including the date the notice is served, you establish the timeline of the eviction process if the situation ever goes to court. Likewise, tenant’s cannot claim they were given the eviction notice on a later date to buy more time.
  4. Reason for Eviction
    There are several accepted reasons for eviction.
    Pay Rent or Quit Notices
    This eviction notice is issued when a tenant fails to pay rent. In order to continue the lease, the tenant must pay rent by the time period specified or they will be evicted.
    Cure or Quit Notices
    If a tenant violates part of their lease agreement, such as keeping a pet against lease regulations, the tenant must “cure” or remedy the issue or face eviction in the specified time frame.
    Unconditional Quit Notices
    These eviction notices do not give tenants the opportunity to remedy the situation. They are used in extenuating circumstances, such as a tenant performing illegal activity in the property or by threatening other tenants. The specifics for unconditional quit notices vary from state to state.
    Month-to-Month Termination
    If a tenant is living on a month-to-month basis, a landlord must issue a formal notice of the termination of the lease. Unlike the previous eviction notices, month-to-month termination is merely a landlord choosing not to extend the lease and does not have legal cause. Tenants are entitled to at least 30 days before they are evicted to find alternative lodging.
    Fixed Term Termination
    Like month-to-month termination, fixed term termination does not require a violation of the tenant’s lease. The landlord is simply not extending their contract for another year. Again, tenant’s will have a time period in which they are expected to find alternative lodging before they must vacate.
  5. Time Period to Fix Violations
    An eviction notice must include a period of time that gives the tenant the opportunity to fix their violation. In many cases, this time period is 3 days, but this can vary. This proves the tenant knew about their violation and was given a chance to fix the issue before they were evicted.
  6. Lease Termination Date
    If a tenant does not comply and refuses to pay rent or address violations, the eviction notice must include the formal date they will be evicted. Again, having a formal eviction date leaves no room for error on the tenant’s part.
  7. Landlord’s Signature
    The landlord’s signature is imperative because it proves to the tenant that the eviction notice is legitimate and it proves for the landlord’s records that the notice was filed.

Evicting a Family Member

While very similar to a standard eviction notice, evicting a family member requires a few more pieces of information. A family member in a household can be classified as a tenant or as a licensee. 

A family member classified as a tenant is privy to all the rights granted to tenants in a rental lease. To be classified as a tenant, there does not need to be a formal lease, simply the payment of rent. Rent can be considered a monthly payment or contributing to the costs of the household. If your family member pays for utilities or groceries but does not pay formal rent, they are still classified as a tenant, and tenants’ must be served a legal eviction notice. 

Certain states do not require legal filing of eviction if a family member has not paid rent. Other states qualify these family members as a licensee. A licensee is considered more than a house guest and is granted more rights. Licensee’s require a legal eviction notice.

Do I Pay Rent After an Eviction Notice?

Whether or not you have to pay rent after receiving an eviction notice depends on the terms of your lease. Carefully read over the section of your lease that deals with eviction to determine what is required of you as a tenant. In some cases, renters have to pay the first and last month of their lease up front. If you fall under this category, your last 30 days have been paid for. 

Whatever your situation, be prepared to have your leasing agreement on handed so you can reference it throughout the eviction process. Many renters are unaware of their rights, and will pay more than the landlord is entitled for.

Ensuring Eviction Is Handled Appropriately
If you need help with eviction documents and filing requirements, contact us now.

What is Probate?

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Probate is the process of determining the legal validity of a person’s inheritance and to authorize an executor or administrator. Probate can take anywhere from a few months to several years.

Some states have simple Probate for small estates, which can shorten the process significantly or even avoid the Probate process altogether. You can also avoid Probate with living trusts and joint tenant ownership.

What is the Probate Process?

There are various legal documents associated with the process. These are standardized in most states by the Uniform Probate Code (UPC), which is designed to make things simple. The documents include:

  • A petition or application for Probate which should be accompanied by a death certificate and the will.
  • Proof that you have posted notice of Probate, which should be published in local newspapers and mailed to creditors and beneficiaries.

Probate can be a complicated process, if you are in doubt, Legal Docs by Me can help make it simpler. For help with Probate, contact us today.

Prenuptial Agreement

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When you hear the phrase “prenuptial agreement,” you may immediately think of Hollywood weddings gone wrong. The idea that prenuptial agreements (or “prenups”) are only important for high net worth individuals is, however, a common misconception. Prenuptial agreements can serve an important role for any couple preparing for marriage.

What is a Prenuptial Agreement?

A prenuptial agreement is a written contract between a future married couple that defines each of their property assets and how these rights will change after the marriage. Prenups are most commonly associated with divorce, but there are a number of reasons to consider drafting a prenuptial agreement before marriage.

When to Consider a Prenuptial Agreement

While contemplating a future divorce may not feel natural to two individuals preparing for marriage, it is an important consideration. A prenup can be a valuable tool for any couple, regardless of the value of their assets. When a couple is deciding whether a prenup makes sense, the following should be taken into consideration:

  • Future Legal Complications
    In the unfortunate situation of a divorce, fighting over assets can be avoided with a well-drafted prenup. A prenup allows a couple to think through financial implications with a clear head rather than fighting about them down the road when emotions may be more charged.
  • Separate Assets
    Do you or your fiancé have assets you would like to carve out from your community property? One common example is if one person has children from a prior marriage. A prenup can specify which assets are earmarked for these children.
  • Debt Protection
    Couples may enter a marriage with vastly different financial pictures, including varying amounts of debt. A prenup allows you to allocate debt as separate or marital, ensuring that the more financially stable party won’t be responsible for certain debt in case of divorce.

Important Prenup Considerations

Some considerations when drafting a prenup include:

  • Any real property owned by either party;
  • Consideration of all assets;
  • Analysis of any debts, including possible future debts;
  • Ownership interests in any businesses;
  • Retirement accounts and benefits; and
  • Any other possible beneficiaries of certain property

How to Nullify a Prenuptial Agreement

  • Duress/Coercion
    A prenuptial agreement can be nullified if one party signed the agreement under significant duress or coercion. Some examples include signing the prenuptial agreement without adequate time to review the document (such as hours before the wedding).
  • Failure to Disclose
    If a prenuptial agreement fails to mention assets or debts of one of the intended spouses, there is grounds for nullifying the prenup. Spouses who sign a prenuptial agreement without knowing the entirety of their partner’s financial situation don’t have all the information necessary to agree to the listed terms.
  • Unfair Division
    In the case that a prenuptial agreement is vastly in favor of one party over the other, the agreement can be nullified. It’s important to note that an uneven division of assets is not enough to nullify the prenup; the disparity between the two parties must be extreme.

All three of these methods simply provide grounds to challenge the prenuptial agreement in court; the document is not automatically null for any of these reasons. In some cases, spouses are willing to settle outside of court, in which you should have a legal representative present to oversee the process.

Does a Prenuptial Agreement Survive Death?

In the case of the death of a spouse, there may be some conflict between the terms stated in a prenuptial agreement and the terms stated in the deceased party’s will. Because a prenuptial agreement is considered a contract and the other spouse is still living, in many cases a prenuptial agreement supersedes the contents of a will. 
Making sure your prenup is comprehensive can be stressful. Contact us today for assistance.