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    Joshua and Laura Meier Newport Beach Trust and Estate Planning Attorneys Focused on Helping Families with Young Kids
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    Category Archives: Corporate Formation

    How to Protect Your Real Estate Assets

    If you own real estate, chances are you have purchased insurance to protect your assets against damage or loss.  But have you taken the necessary steps to protect your assets against lawsuits or probate?

    If you own rental properties, there is likely a nagging fear in the back of your mind about being sued by one of your tenants.  And if there isn’t, there probably should be.  It’s a major risk.Real estate

    And while it may be heartbreaking to think about, there is always a chance your death could trigger a family feud over your home, vacation home or other real estate investments.

    Two common estate planning tools for real estate asset protection are limited liability companies (LLCs) and trusts:

    LLC

    If you have income-producing property, then an LLC probably makes sense for you, since it protects your personal assets from lawsuits or claims that result from your ownership of the real estate.  LLCs may also offer owners privacy since the property can be listed in a company name, not in your name directly.  However, you must be sure you maintain the LLC properly so the planned for protections remain intact.  It’s not too difficult though, especially with counsel.

    Trusts

    If you own vacation home property that you do not rent out on a regular basis, then a trust may be a better choice for you.  There are several options:  a Qualified Personal Residence Trust (QRPT) is an irrevocable trust (meaning it cannot be changed without the consent of the beneficiaries) that allows an owner to use the property for a fixed term, and then pass the property on to heirs.  This is a commonly used structure to reduce the size of your estate for estate tax purposes.

    A revocable trust (which can be changed without consent of the beneficiaries) is more flexible and, if you choose a dynasty trust, can last for multiple generations.  The major benefit of the revocable trust, besides control of what happens to the assets after the death of the grantors, is that it keeps your assets out of the hands of the Court after your death, and totally within the control of your family.

    You can also use a combination of LLCs and trusts to protect real estate assets if you have a combination of primary residence and rental properties.  We can help you decide on the best course of action for your individual circumstances.

    Call our office today at 949.718.0420
    to schedule a time for us to sit down and talk about an Achieve Your Dreams Planning Session, where we can identify the best strategies for you and your family to ensure your legacy of love and financial security.

    Why Every New Business Needs a Lawyer & How to Find a Great One

    Chances are if you are an entrepreneur, you have a little “issue” when it comes to controlling everything about your company — in other words, you find it hard to trust others when it comes to your “lawyer-consultation (1)baby.”

    But unless you are an experienced business attorney, you probably don’t have the knowledge — and most certainly the time — to understand the legal implications of just about every decision you will be making about your new business, including its structure, the agreements and contracts that will determine how your company will function and be profitable, and even hiring your first employee.

    While entrepreneurs are usually great problem solvers, a good business lawyer is trained to see potential problems before they can adversely impact your business or put your personal wealth at risk.

    A recent article at Entrepreneur.com provides entrepreneurs these tips for choosing the right lawyer for their business:

    1.  Look for a good fit.  Finding someone to meet all your legal requirements may be much easier than finding a good fit personally, but face it — you want to be in business with this person for the long haul, since his or her good advice can continue to keep you out of trouble and save you some serious cash by avoiding litigation.  Find someone you click with on a personal level and who can relate to what you need.  Most importantly, look for a lawyer who will be proactive

    2.  Do not use a friend.  You need someone with total objectivity, and you want to be able to be completely honest with your attorney, so usually choosing someone who is not already a personal friend is your best bet. If you do use a friend who you really trust, don’t do it for a trade. Pay  your lawyer. And make sure whoever you use really understands your business.

    3.  Ask for referrals.  If you know other attorneys or friends who have used business lawyers, ask them for a referral.  The interview those attorneys before making a commitment by phone or email.  Use our hiring guide to ask the right questions.

    4.  Stay away from DIY websites.  The do-it-yourself legal documents you can get online could get you into more trouble and end up costing you much more in litigation than you would have spent on a real, live, breathing attorney in the first place. If you are using a template document, have it reviewed by your lawyer before it’s finalized.

    5.  Consider size.  Law firms come in all sizes, with pros and cons for each.  Larger firms usually offer a fuller complement of resources, including multiple locations and more specialized practice areas., plus higher prices and less personalized services.  Smaller firms and solos are usually more hands-on and can be more economical.  Decide first what you need and choose the firm that can best deliver to those needs.

    Whether you’re starting or already running a business, the best time to hire a lawyer is before you need one.  Having a business attorney that understands the individual needs and unique circumstances of your company is key to helping your business thrive and prosper.  If you are interested in learning more about legal protection strategies for your business and how we work with you as a partner in protecting your company, call us today to schedule your comprehensive LIFT™ (legal, insurance, financial and tax) Foundation Audit.

    When Business (Founding) Partners “Divorce”

    How you go about handling the situation [of a business partnership
    split-up] can mean the difference between an amicable split, where you run the
    business as you see fit, and a messy divorce, in which you wind up losing
    money, clients, resources or other critical assets.

    In every end there is a beginning.
    When it comes to the founders of a business, there also ought to be an end. An
    amicable end.

    As Stephen Covey noted so
    adroitly, one of the keys to effectiveness is to “begin with the end in mind.”
    Accordingly, the founders of a business should structure and run the business
    with a clear commitment to their shared ultimate goals for themselves and their
    business. In the vernacular of business planning, this oftentimes is called
    “exit planning.”

    If you fail to “begin with the
    end in mind” and make legal plans to memorialize the end game for your personal
    and business relationships, then you likely will only enrich lawyers. So, when
    it comes time to part ways down the road, what steps should you be taking now?

    The Wall Street Journal
    recently addressed this subject in an article titled “Breaking Up (With a Co-Founder) Is Hard to
    Do
    .

    One key takeaway from the
    article is the “when and how” of exit planning. The best time to address the
    issue is when the business is founded. Consequently, the best way to
    memorialize the exit strategy in the event of the disability, retirement or
    death of a founder is through various legal documents created when the business
    is founded. For example, an Limited Liability Company (LLC) can use the LLC
    Operating Agreement, while a corporation may use its Bylaws or various
    Shareholder Agreements.

    Regardless, one thing is clear:
    do not bury your head in the sand. For every business, an “exit” will be
    required. As a result, you can either make plans now, or leave it up to lawyers
    to clean up (literally) later.

    Contact Meier Law Firm to discuss all of your Estate Planning needs. 

    Reference: The Wall Street
    Journal
    (September 22, 2012) “Breaking Up (With a Co-Founder) Is Hard to
    Do




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