Choosing to start a small business is both exciting and challenging, but there are many legal aspects that arise when you start. Once you determine what your small business services and target market are, as well as constructive a business plan, you will want to ensure that you follow all the necessary legal steps to launch a compliant, profitable and successful small business.
Rhodes Law Firm in Augusta offers business law services to our clients in Augusta and across the CSRA. Rhodes Law Firm is devoted to the practice of planning and protecting the assets of your business. Below, Rhodes Law Firm provides helpful tips and requirements to ensure that you’re legally starting your small business the right way.
1. Do your own small business research
The first step to starting your own business is to research the process and ask yourself very important questions before jumping right in.
- What are my small businesses goals?
- Am I providing goods or services?
- Do I want to hire employees or be a solo entrepreneur?
- What financial requirements are present and what capital do I have available?
While you’re answering these questions, you’ll gather information and learn more about the legal processes of starting a small business. Each individual has different needs for their small business and there is not a specific one-size-fits-all legal solution to starting a business. For the best results and to ensure that you are starting your small business legally and on the right foot, contact the business lawyers at Rhodes Law Firm in Augusta and let us assist you in your small business legal matters.
2. Determine the structure of your small business
As an independent professional starting a small business, you need to be aware of federal tax obligations from income, self-employment, estimated, employer and excise taxes. Once you establish your specific business structure, that will determine your federal tax obligations as well as the forms you use to report these taxes. The U.S. Small Business Administration (SBA) provides more information regarding these taxes and forms.
When creating your small business, these are some options to consider when determining your businesses structure.
Many independents begin their small business creation journey as sole proprietors. For tax purposes, you generally operate under your personal social security number, but you can apply for a Taxpayer Identification Number (TIN) for your business by filing an IRS SS-4 and asking for an Employer Identification Number (EIN) as your TIN instead of using your personal social security number. The business is generally run under your legal name. If you want to give the business an alternate name, you’ll register a Doing Business As (DBA) to state the name you intend to give your business. This process lets your state or local government know the name you are operating your business under. Specific DBA registration rules vary from state to state. You may also apply for a Federally registered business trademark or trade name.
Limited Liability Company (LLC):
Originally designed to protect owners of a business from certain business-related liabilities, the LLC structure has since become popular for independents due to its simplicity yet strong legal protections of a corporation shielding your personal assets. LLC is the next step above a sole proprietorship.
S Corporations are also referred to as an S-Corp and this is a business structure that has received the Subchapter S designation from the IRS. According to the IRS, S-Corps are considered by law to be a unique entity, separate and apart from those who own it. With this structure, subject to similar exceptions as described above for LLCs, you have the limited legal liability (separation of personal assets from your business) of a separate legal corporate entity as well as the separate tax entity. Provided the owners are eligible to make and make a timely election with the IRS, the profit from your business is reported under a separate tax return filing for 1120s but the taxable profit passes through to your personal tax return on form 1120 K-1. Thus, there is generally just a single level of tax.
An attractive option for the savvy independent professional, C-Corps make owners shareholders. A C-Corp has the same status that Fortune 500 businesses hold—they are corporate entities separate from their owners. In the case of an individually owned C-Corp, you are not just the owner of your company, but the majority shareholder. Because the corporation is a separate legal entity, it is an individual taxpayer in the eyes of the IRS. While this structure is one of the most complex business arrangements available, it is also the most sophisticated, making it an attractive option for independents.
Making sure that you choose the right structure for your small business is very important and you want to make sure that you’re creating your business the right way from the foundation and up. To ensure the best results when starting a small business, consider contacting the business lawyers at Rhodes Law Firm in Augusta.
3. Choose and Register your small business name
If you are starting a small business and choose to file as a Sole Proprietor, then to register your business name you’ll register a “Doing Business As” (DBA) or “Fictitious Business Name” (FBN). This process lets your state or local government know the name you are operating your business under. This registration doesn’t provide trademark protection, but it does allow you to create and use the name you want for branding purposes without having to incorporate. It also does not constitute a legal entity or provide any legal protection to the Sole Proprietor.
If you don’t register a DBA as a Sole Proprietor, the name of the business will default to the name of the owner’s legal name. For those who are filing a legal entity, an application must be filed with your state for either Articles of Incorporation of Articles of Organization. Whether you choose an LLC, S-Corp or C-Corp, you will need to file a name for the company.
If you are planning on providing online services, then you may want to consider getting your business name trademarked. A DBA or incorporated business name will not offer brand protection in the 49 states where your business is not registered. While trademarking is not a requirement, it will provide stronger protection for your brand. This process involves applying for a trademark with the U.S. Patent and Trademark Office. If you do want to pursue a trademark, start by conducting a thorough and comprehensive search to make sure the name you want to use is available.
For the safest and most legal way to ensure your small business is registered, contact Rhodes Law Firm in Augusta and allow our business law experts to register your small business with the State of Georgia.
4. Secure your required business permits and licenses
No matter your small business and the products and services you offer, more than likely you will need to obtain the required business permits and licenses. Federal business licenses are required for any business involved in any sort of activity that is supervised and regulated by a federal agency while state licenses will vary.
5. Create a compliance plan
Even as a small business owner, you could be subject to the laws and regulations that apply to large corporations. These include advertising, marketing, finance, intellectual property and privacy laws. For companies that have employees, there are additional state and federal regulations that may need to be followed situationally.
Additionally, small businesses must ensure that they are free and clear of contractor misclassification concerns. Not only is this a threat to the small business itself, but also to its clients. Make sure that you’re taking the appropriate steps when creating your small business to mitigate your risk by consulting with business law experts at Rhodes Law Firm in Augusta.
6. Protect your small business with insurance
If you have decided to start your own small business as an independent professional, then you are responsible for ensuring the legal and financial wellbeing of your consultancy. Remember that you are your business and any legal or financial problem that arises will directly affect your company and you. It’s crucial to starting a small business that you protect your business against the risk of liability losses.
There are different types of insurance that you can protect you and your small business with. Depending on the industry, the size of your business and the types of prospective clients you expect to work with will all determine what’s the best insurance for your small business.
General Liability Insurance:
General liability insurance is often necessary for independents. This insurance covers a wide range of incidents, including accidental damage to a client’s property, claims of libel or slander and the cost of defending lawsuits.
Errors and Omissions Insurance:
Errors and omissions insurance, also known as professional liability insurance, provides protection in the instance that a client incurs financial harm due to an error or omission. In other terms, it’s a failure on your behalf to perform an integral part of your responsibility on a project.
Home-based Business Insurance:
While an insurance policy for a home-based business doesn’t apply to everyone, it’s relevant for independents who choose to work out of a home office. Most homeowners’ insurance policies do not cover losses sustained out of a home office, but an insurance policy for a home-based business can provide the protection you and your clients need.
Are you ready to start your small business legally and the right way?
Starting a small business can be one of the best decisions of your life. The exciting challenge of creating a small business and watching it become successful is one of the most rewarding moments for an entrepreneur. However, ensuring that your small business continues to grow and builds a strong clientele base is a realm of uncertainty that requires a leap of faith.
If you’re ready to start your own small business, then hopefully the tips and recommendations above help steer you in the right direction. If you want to discuss business law and creating your own small business, contact the lawyers at Rhodes Law Firm in Augusta and let us help you elevate your business ideas and expectations the legal way.
With the election coming up, it may be a good time to review and work to implement any changes necessary to your estate plan. This article by The National Law Review suggests that while no major changes would take place if Republicans are in control of the White House, Senate, or House of Representative. However, if Democrats take control of all three, there would likely be a reduction in the current federal gift and estate tax exemption of $11.58M.
These possible changes do not mean that everyone needs to do something now to prepare. Everyone’s own situation is different and you may not be affected at all. If you would like to find out more and review your estate plan with experienced advisors, contact Rhodes Law Firm today. You can expect a tailored plan for your unique situation.
Trying to delegate and figure out the estate and the probate process can be time-consuming, overwhelming and expensive. If you are currently having issues or are dealing with probate, contact the probate lawyers at Rhodes Law Firm in Augusta and let us assist you. At Rhodes Law Firm, we are committed to our client’s best interest throughout the probate process and making sure we do everything in our power to make it as simple and worry-free on your end as possible.
What is a probate lawyer?
A probate lawyer is a lawyer who specializes in matters related to a deceased person’s estate. They have a wide range of responsibilities, which includes the following:
- Guiding individuals through the probate process
- Advising the beneficiary (or beneficiaries) of an estate
- Representing beneficiaries if they become involved in lawsuits related to the estate
- Assisting with challenges to the validity of the deceased’s will
Should you hire a probate lawyer?
If you are struggling to deal with the matters related to your loved one’s estate, then it might be in your best interest to consider hiring a probate lawyer, like the probate attorneys at Rhodes Law Firm in Augusta. A probate lawyer can provide a variety of services to you related to the probate process and your loved one’s estate.
Below are some of the common issues and obstacles that can arise when dealing with probate court:
- Someone contested the will
If another beneficiary has contested the will or is planning to do so, then it is a good idea to get a probate lawyer on your side as quickly as possible. If anyone contests the will, it will instantly drag out the probate process and will put you at risk of losing whatever you’re loved one intended to be left for you.
- There are split assets
If split assets are a part of an estate, then the probate process could get extremely complicated, especially in estate plans with intangible assets. If you’re dealing with an estate that has split assets, it is best to hire a probate lawyer that can help navigate the division of these assets and ensure everything is handled in a fair manner.
- The estate doesn’t qualify for simple procedures
The probate process is almost always a guaranteed headache, and some probate processes are much more complicated than others. Depending on the size of the estate, it could qualify for simple procedures and you can wrap things up relatively quickly. However, if you are in a complicated probate court process dealing with an estate, you’ll likely want to hire an attorney, like the probate lawyers at Rhodes Law Firm in Augusta.
- The deceased has a lot of debt
If your loved one passed away with a significant amount of debt, the estate will be used to pay off those debts. These types of probate issues can be tricky to navigate on your own, so you’ll likely want to consider hiring a reputable probate lawyer, like the lawyers at Rhodes Law Firm in Augusta.
An experienced probate lawyer at Rhodes Law Firm will help ensure that everything is paid off and can even negotiate your deceased loved one’s debts to ensure you and the other beneficiaries receive as much from the estate as possible.
- The estate contains a business
If a business is a part of the estate, then you will likely want to hire an attorney to sort everything out. There is substantial expertise and experience needed when you’re dealing with the process of appraising, managing and selling a business, especially if the owner passed away.
If the estate your dealing with contains a business, you should consider contacting the probate lawyers at Rhodes Law Firm in Augusta. We are experienced in dealing with estates that contain businesses and will work to ensure you receive what you deserve in the wake of your loved ones passing.
Should you hire a probate lawyer?
If any of the above situations applies to you and the estate you’re concerned with, it is probably in your best interest to contact the reputable and experienced probate lawyers at Rhodes Law Firm in Augusta. However, if you are not in the Augusta area, below are a few things to look for when hiring a probate lawyer.
- Consider the experience of the probate lawyer
If you are in the Augusta area, then you are able to contact the experienced probate lawyers at Rhodes Law Firm. Always ensure that you are hiring a probate lawyer with a track record of success and extensive expertise in dealing with probate court and estates.
- Request a consultation
Most law firms, including Rhodes Law Firm in Augusta, offer free consultations before you agree to work with them. This is the opportune time to determine whether or not the specific probate lawyer is a good fit for you and what you need.
- Read their reviews
Before you jump into anything, read the reviews and find out how other people felt using a specific law firm. Networking and determining how other people felt about their experiences will give you an extra security blanket when deciding on which probate lawyer to hire.
As you can tell, the probate process is a complicated and tricky situation that doesn’t have a set-in stone, cookie cutter method to fix it. Each estate is unique and requires an experienced lawyer who understands probate, estates and getting things done quickly, like the probate lawyers at Rhodes Law Firm in Augusta. Keep all this information in mind when selecting a probate lawyer to devise and delegate your loved one’s estate. If you want to hire a probate lawyer from Rhodes Law Firm, contact our office and request a free consultation regarding your estate.
No one likes to think of a time when they might need assistance or long-term care, so planning for this possibility in life often gets put off and forgotten about. Most people first find out about long-term care planning when they or a loved one needs care, but by this time, it’s too late to plan and prepare. At this point, usually options are limited because of the lack of information and time as well as the immediate need for long term care services.
Planning ahead for long-term care allows you to have more control over your future and give you peace of mind for any possibility that may arise. The lawyers at Rhodes Law Firm in Augusta are committed to providing our clients with long-term care planning services that they are happy and comfortable with. Don’t let fear and procrastination stop you from planning for long-term care in your future. The earlier you start, the more options and protection you have with the long-term care planning lawyers at Rhodes Law Firm.
Why you should you look into long-term care planning?
Planning ahead for long term care is important because there is a good chance you may need some type of long-term care services if you live past the age of 65. Roughly about 70% of people over the age of 65 require some long-term care services and the likelihood of you needing these services increases with age.
Another good reason to talk with the long-term care planning lawyers at Rhodes Law Firm in Augusta is so that you can understand everything regarding long-term care for when you need to make decisions for you and your future. Discussing long-term care planning with the attorneys at Rhodes Law Firm will expose you to the available service options in the area and community, what special conditions apply for receiving services, what the services cost and what payment options apply to desired long-term care planning services. Having this information helps ensure that you will have knowledge and an understanding of the options when you need long-term care and it makes it more likely that you will have more control over how you receive long-term care planning services when the time comes.
Having a clear understanding and basic knowledge regarding long-term care planning services is important because the cost of these services often exceeds what the average person can pay from income and other resources. By looking ahead and planning for long-term care now, you can save your assets and income for uses other than long-term care.
Long-term care planning with Rhodes Law Firm means that you won’t leave your family or loved ones in a difficult situation to make hard decisions. When you decide to discuss long-term care planning with the lawyers at Rhodes Law Firm in Augusta, there is a greater chance of being able to leave an estate to your heirs since it is less likely you will use up your financial resources and assets paying for long-term care. In the long run, that means less emotional and financial stress on your family and an improved quality of life.
Another main reason that many people choose to discuss long-term care planning for the future with the lawyers at Rhodes Law Firm is the independence they feel choosing their own options. Your choices for receiving care when you need it is an easier pill to swallow if everything was taken care of by you beforehand. Your choices are important, so deciding exactly how you want your long-term care services is an advantage that many people appreciate.
Why most people don’t want to think about long-term care planning
There are a lot of reasons that people don’t want to plan ahead for long-term care. Usually the main reason is the natural tendency to avoid thinking about becoming dependent on others for your care and everyday life. Other reasons include misinformation about the risks of needing care and a lack of knowledge regarding long-term care and the payment options.
Many people don’t like to think about getting older, I mean who would? No one wants to think and plan for the day of when you develop a disability, become less independent or need someone to help you with personal care. However, many people don’t realize that the chances of needing long-term care once you get past age 65 are very likely. On the other hand, some people find it too difficult to raise these questions with their loved ones because of the difficulty it can be exploring plans and options. But long-term care planning is important and will provide peace of mind you deserve.
Another common misunderstanding is how expensive long-term care is and how it is paid for. A lot of individuals do not realize that health insurance, Medicare and/or disability coverage do not pay for most long-term care services. It is best to speak with a long-term care planning attorney, like the lawyers at Rhodes Law Firm in Augusta, to discuss your options and decide the best option regarding long-term care and your future.
Is long-term care planning something you should check on?
If you are nearing the age of 65, it could be in your best interest to speak with an attorney at Rhodes Law Firm in Augusta to discuss your long-term care planning options. Although thinking about the future and the possibility of needing assistance and care is tough, it could help and make both you and your loved ones lives emotionally and financially easier when the day comes. Be prepared for the future possibilities and get the peace of mind you deserve with the long-term care planning lawyers at Rhodes Law Firm.
Planning your estate is essential in normal circumstances. Add in the uncertainty and risk that come along with a pandemic, and it really is a wise move to have your affairs in order. This article highlights that the suggestion of planning your estate now isn’t just based on the issues of morbidity, as many survive COVID-19, but if you require hospitalization or if you fall ill, it may bring you peace of mind to know everything is settled.
While estate planning can be complicated, it doesn’t have to be. Some helpful documents to get started, as listed by the Emporia Gazette, are:
- Financial power of attorney – This would give someone of your choosing the authority to conduct your financial affairs if you are unable to do so
- Last will and testament – choose how your assets are distributed and appoint an executor to oversee the distribution
- Living trust – allows you to leave assets to heirs without probate, also provides more flexibility in regards to how you disperse your assets
- Health care surrogate – should you become incapacitated, this person can act for you regarding your medical care
- Living will – allows you to specify end-of-life treatments that you do or do not want
The process of estate planning or updating requires time, with notarization and witnesses necessary. During a time of quarantines and social distancing, those things may be more difficult to accommodate than usual. It is best to act sooner rather than later, and you can be content knowing that if the worst does happen, everything is already settled and in place.
Call Rhodes Law Firm today to get started!
Most American adults do not have a will or a plan in place in case of a tragedy. The death of both parents in an accident can leave children’s fate left to a judge and your assets distributed the way a court deems fit and not by your wishes. Even in the even that a tragedy occurs, and you’re incapacitated, others will decide your healthcare options.
Having an estate plan in place can help you be prepared in the event of an unforeseen tragedy. If you die without a will or estate plan in place, state law determines where your assets are distributed. The attorney’s at Rhodes Law Firm in Augusta help assist you in establishing an estate plan and protecting your hard-earned assets the way you want for when you can’t decide.
Below are 10 tips to estate planning that the lawyers at Rhodes Law Firm think you should know.
It’s never too early to start planning
- The first tip to estate planning is simple… research. If you’re reading this far, then you’ve already taken initiative to decide if you should create an estate plan for your future.
Death is unavoidable, and excuses aren’t going to keep it from happening. No one knows exactly when their time is but being prepared and taking park in an estate plan built for you by the lawyers at Rhodes Law Firm will provide you the peace of mind you deserve. Don’t allow pride and misconceptions to leave your estate and heirs broken and with nothing while also working through all the probate court hearings that follow.
If you want to start planning your estate, contact the lawyers at Rhodes Law Firm in Augusta and allow us to help you prepare for your future. Planning your estate includes but is not limited to the following:
- Taking inventory of your assets & liabilities
- Determining your beneficiaries
- Deciding who will manage the plan
- Deciding who will be your power of attorney & healthcare surrogate
- Deciding who may be your children’s guardians
Don’t draft documents yourself
- When it comes to your life, property and legacy, don’t jump into any critical errors. Meeting with an estate planning attorney at Rhodes Law Firm in Augusta will ensure that your documents are valid, accurate and precise.
The estate planning lawyers at Rhodes Law Firm will draft your documents ensuring they:
- Are valid & sound according to Georgia Law
- Accurately reflect your wishes & inventory
- Correctly define your intentions for the treatment of yourself & the disbursement of your property
The entire plan is crucial for deciding your health treatment and ensuring your assets are protected when you are unable to do so. If you do not draft the form correctly or understand certain clauses, it will cause errors for you after you’re gone when you can’t change them.
Talk to your significant other about estate planning
- Discuss the possible outcomes with your significant other for what would happen if you pass on before they do. If you are married, most likely guardianship of your shared children and all of your property and finances will transfer to your surviving spouse unless otherwise noted.
Things become more complicated if you have children from multiple partners. If this is the case, you should seek professional advice or counsel from the estate planning attorneys at Rhodes Law Firm in Augusta.
Plan for the possibility that both you and your spouse will pass and discuss who should inherit your children and property. The conversation may be difficult to have, but it’s worth having to protect your property and hard-earned assets in the event of a tragedy.
Establish who gets what
- After consulting with the estate planning lawyers at Rhodes Law Firm in Augusta, your estate plan should account for the following:
- All property (personal & real)
- Bank accounts
- Insurance policies
- Anything in your name
Once you take note of all your property and assets above, you will then decide who the beneficiaries are of those things. Guardianship of children must be awarded if there are surviving minors. Establishing who gets what in your estate plan ensures that your property and assets are distributed exactly where you want.
Choose exactly how your estate should spend your money
- Be specific when allocating funds. Decide if you want money spent on funeral ceremonies, donated to charities, inherited directly or a mix of all. Whatever you want in your estate plan, the lawyers at Rhodes Law Firm will make sure your wishes are taken care of. The money in shared bank accounts and trusts will remain in control of the joint owners but will be subject to their creditors and yours.
Other funds and assets may also distribute through trusts or a will. The questions you want to answer when it comes to disbursing finances are:
- What finances need addressing?
- Who receives them?
- How exactly will they be distributed?
- When will the beneficiaries receive these assets?
Minimize estate & income taxes
- Taxes can be avoided or minimized by consulting an estate planning attorney at Rhodes Law Firm in Augusta. An experienced attorney at Rhodes Law Firm can direct you to the most beneficial methods of distributing property to maximize your financial savings. There are plenty of opportunities to ensure that beneficiaries receive the highest possible percentage of their intended inheritance.
If you fail to talk to an estate planning attorney before tragedy strikes, it could result in your hard-earned money and assets being spent on services after your death. It’s your family and inheritors who suffer at the expense of no estate plan in place so protect them and your estate while you still can.
Seek professional guidance
- Seeking help from the right professionals will save you time and money when it comes to planning your estate. Consulting with an estate planning lawyer at Rhodes Law Firm in Augusta, or from financial planners and tax experts, will expose you to strategies and estate planning tactics you were unaware of.
Plan for more than just asset distribution
- Estate planning at Rhodes Law Firm in Augusta consists of more than just asset distribution. The estate attorneys at Rhodes Law Firm will discuss power of attorney for managing your finances during incapacitation and in the case of death, durable power of attorney. Rhodes Law Firm will also consult with you on healthcare surrogate documents which appoint a representative to make healthcare decisions on your behalf, guardianship of minor children and living wills for specific wishes that need completion on behalf of an individual.
There is so much more to think and plan for when it comes to your estate other than just inheritance. Ensure that your children and finances are in good hands be deciding now how your estate will be handled and distributed upon your passing.
Avoid probate as much as possible
- Probate is the court process through which a will is proven. Trusts generally avoid probate and thus save your estate money and other benefits. Probate court costs are very expensive, and probate can drag on for years. Avoid the headache and fees of probate court all together by establishing an estate plan with the estate lawyers at Rhodes Law Firm in Augusta.
Plan your memorial
- One hardship that family and friends must overcome while dealing with the loss of a loved one is trying to decide how to plan the memorial service. After your death, your family will be grieving and the planning that goes along with the financial burdens of a memorial service can be difficult for your family to endure.
To help prepare your loved ones for the days when you are no longer with them, it is encouraged to plan your services in advance. You will be able to dictate the ideal ceremony for yourself while giving the ones you care for most the comfort of not having to wonder what’s best.Rhodes Law Firm in Augusta is dedicated to ensuring our clients have peace of mind when it comes to planning their estate. At Rhodes Law Firm, we want you to be informed and your family, assets and property to be protected. Contact the estate planning lawyers at Rhodes Law Firm and allow us to assist you in helping prepare for your future.
It’s an uncomfortable topic, it’s difficult to think about, and it’s not exactly how many people want to spend their day off. However, it is absolutely necessary. Estate Planning is essential to preparing for the inevitable and ensuring that your loved ones do not have any unavoidable stress on them during a very difficult time. It is understandable why many choose to avoid this process, and this article lists a few of the more common reasons and also lists some helpful things you can do right now to make things easier should something happen.
The three most common excuses for avoiding estate planning are: too busy, too complicated, and too superstitious. There are a few things you can do at this moment that are simple and easy and will help take the burden off your loved ones in the event of an emergency or unexpected death. First, share passwords to all accounts and services. In addition, let your family know who should speak for you if you cannot communicate yourself and what you would like done in a medical emergency. Thirdly, make a financial aggregation of all assets and money you have and also your debts. The final thing you can do is create a will and power of attorney. We know, it’s hard to think about, but this ensures your assets go to the right people.
If you would like any assistance with planning your estate or creating your will, please give our experienced and knowledgeable team at Rhodes Law Firm a call today.
Losing a parent is often one of the most difficult times a family can face. Many times, it can result in friction between siblings. There are simple ways to help avoid this, however, such as deciding early how property should be sold or maintained. This article elaborates on specific steps you can take now to help keep the peace during a difficult time for your loved ones. Below are some ideas and suggestions to consider when making your estate plan.
- Find a Real Estate Attorney with Experience and Referrals – It’s important to work with someone who understand the needs and wishes of retirees. Find someone with plenty of experience in the field as well as satisfied clients.
- Produce an Overview of Your Financials – One easy way of helping your beneficiaries simplify the process is to create a simple overview of what you own and where. This minimizes any possibility of skepticism. This overview should include a list of all assets, liabilities, and insurance policies, as well as contact information for all insurance and legal professionals you have. It would be a good idea to include usernames and passwords for any accounts or websites.
- Communicate with Your Family Now – Once you have the above steps in place and completed, it is vital you communicate with your family to prevent any miscommunication in the future. Discuss your estate intentions and legacy items that are important to you. Explain who your executor will be as well as let them know where the important documents are kept.
If you are ready to meet with an experienced and reputable estate attorney to begin your estate planning process, call Rhodes Law Firm today!
When you pass away, your family could have to visit a probate court to claim the inheritance you left behind. If you own property like a house, car, bank account, investment account or any other possessions you wish to pass on after your death, your inheritors could be in store for a long probate court process.
Although having a will is a good form of planning, a will does not avoid probate. Instead, a will simply lets you inform the probate court of your wishes. Your family will still have to endure the probate court process to make your final wishes legal. In simpler terms, probate is the legal process for distributing your property upon your death.
What is probate?
Explaining the probate process sounds simple, but probate itself is anything but a walk in the park. While probate isn’t always complex, it is important to understand the process, particularly if you want your heirs to avoid probate after your passing.
Your estate executor, or the attorney representing your estate, typically initiates probate. During this process, a probate court validates your will and then authorizes your executor to distribute your estate to your beneficiaries as you instructed, as well as pay any taxes your estate may owe.
If you do not have a will, a further administrative proceeding must be held to determine how your estate will be divided. In this case, the court will name an administrator for your estate, who then follows the probate judge’s instructions on how to distribute your property.
Why should you avoid probate?
Although the probate court process is often straightforward, many people want to avoid it. Below is a list of some common complaints and hindrances regarding probate.
- Probate can be slow. In some cases, it can take years for a probate court to finalize an estate, especially if it’s complicated or involves a contested will. Whether you have a large or small estate, the probate court process will be slow and could drag on for months.
- Probate can be expensive. Costs vary from state to state, but probate generally entails executor fees, attorney costs and other administrative expenses, such as appraiser’s fees. In some cases, these charges can accumulate quickly. The expenses are exacerbated if the process drags on for a while.
- Probate is part of the public record. Since probate is a state legal proceeding, what goes on in probate court does not stay there. All the material in the probate process goes into the public record.
How can you avoid probate?
Maybe you’ve made it through to this portion of the blog and now you’re ready to find out how you can avoid probate. The first recommendation is to call a trusted attorney at Rhodes Law Firm to discuss your estate, options and wishes upon your passing. Below are three simple ways to avoid the probate process.
- Name beneficiaries on all of your accounts that allow you.
Many of your financial accounts allow you to designate a beneficiary who will be payable upon death. This means all the proceeds from your accounts will be given to them rather than going through probate after you pass.
Certain accounts are referred to as a “payable on death” accounts while non-retirement investments are known as “transfer on death” accounts and include:
- Bank accounts
- Brokerage accounts
- Life insurance policies
- 401k plans
- IRA accounts
You only need to complete a couple forms with the name of your beneficiary, and after your death they will have access to the accounts while avoiding probate court.
- Set up a trust to leave property and assets upon death to your beneficiaries.
An easy way to avoid probate when you have substantial assets is to create a trust. A trust outlines what will be done in terms of asset distribution without the courts being involved. While a will distributes your assets and property after your death, a trust allows you to place your assets and property “in trust” while you’re alive so they will not require distribution after your death.
You will personally appoint a trustee to manage your trust and they will make decisions for your beneficiaries. Besides avoiding probate, a trust makes a smart estate planning tool because:
- A trust is private.
Probate records are public court records, which means that anyone can look up how your assets and properties were distributed in a will following your death. None of this information will be publicly available when you create a trust because your beneficiaries will not need to go through the court system.
- Trusts can be less expensive.
Your estate will need to pay for the court fees associated with probate, which can cost anywhere from 2% to 10% of your total estate. The percentages tend to be higher for smaller estates, because many costs are fixed. You do have to hire a lawyer to set up a trust, which can run into the thousands of dollars. Then you must be sure to retitle your accounts into the name of the trust, or you will have paid the trust drafting fees for nothing, and you will still incur probate costs. To totally avoid probate, all assets need to be titled into the trust or to “transfer on death” accounts.
Probate is a process that may require a year or more. If you own homes in multiple states, your family must comply with each state’s specific probate laws, additional court dates and fee structures if you only create a will. Your beneficiaries may need to wait a substantial time to receive what you leave them, which could put them in financial strain.
Since a trust avoids probate, distributions take only a few weeks instead of several months or years. Setting up a trust is the best way to leave property upon death if you are leaving a large inheritance, but you’ll need the help of an estate planning attorney along with an experienced financial planner to get it right. You need to make sure there are assets available to pay any outstanding liabilities before the trust assets are disbursed.
- Hold your property jointly.
Owning a property with your spouse, significant other, or a beneficiary allows it to automatically pass to them without going through probate after your death. You do not have to be married to take advantage of this, but you do need to clearly designate the jointly held property with the right of survivorship.
Interested in estate planning with a trusted and experienced attorney? The law office of Rhodes Law Firm is here to help you plan for the future, and help you avoid the probate process. Make things simple for your beneficiaries upon your passing and allow Rhodes Law Firm to help you plan and avoid the probate process.
A trust is a legal way to set aside your hard earned assets for a specific and desired purpose. A living trust is a type of trust that can be initiated while you are still alive, offering flexibility and control over your estates in the event of incapacitation or death.
How a living trust is different from a will.
You might be asking yourself, “is there really a difference between a living trust and a will?”
Living trusts are set up before you pass on and can be used in case you are incapacitated. A will only goes into effect upon death. Utilizing a living trust can help you avoid probate court and your assets will be granted to your beneficiary immediately.
One reason for consulting with an attorney regarding a living trust is to remove the unnecessary and painful legal proceedings following a loved one’s death. With a will, you can’t avoid probate court and the assets become public record. With a living trust, you exclude probate court and all your assets remain private to your beneficiary.
What exactly is a living trust?
A living trust is a legal estate planning tool that breaks down how your assets are to be used or distributed in any event of incapacitation or death. A living trust specifies legal relationship between three basic groups.
- The grantor, who funds the trust
- The trustee, who manages the trust
- The beneficiary, who receives the proceeds & assets
Living trusts are powerful legal documents regarding your estate and how you would like it dispersed among your beneficiaries upon death or incapacitation. Living trusts protect assets such as real estate investments, bank accounts, investments and property.
Upon your passing, your wishes will be carried out and passed to the beneficiaries all while avoiding the negative aspects of probate court.
Living trusts are important, and below are important reasons to have a living trust.
- Avoid Probate
- Privacy Protection
- Save Money & Protect Property
- Greater Control of Assets
A living trust gives you control of your hard earned assets while you’re still alive, but you pass on the control to a trustee to pay the beneficiary under specified conditions. These conditions allow for greater control over your assets even when you’re gone.
So, why is it a good idea to arrange how your assets will be handled upon death? It helps take away decisions for your beneficiary or spouse during a tough and emotional time. With a living trust, you can place many different assets into a bank account, allowing loved ones to be cared for immediately.
Probate is the court-led process that usually handles an estate after death. In general, the probate process involves a court examining the provisions of a will and the assets included (or excluded) within.
There is usually a waiting period from one to three months in which the beneficiaries could have limited or no access to any of the funds in the estate while in probate. A living trust is an effective method of avoiding probate court. One of the main reasons it is best to avoid probate is because of the fees and other costs which can be calculated as a percentage of the total estate. Avoiding probate means that money won’t be deducted from your estate, and your beneficiaries will receive everything you intended for them to inherit.
A will and all assets not covered by a will are subject to probate and thus become open record. The probate process is public record, which means anyone can look up what assets were in the estate and what beneficiaries received what assets. Setting up a living trust is a method of avoiding probate and can also be used to protect the privacy of your estate and thus your beneficiaries.
Another key benefit of living trusts is that they can be enacted when the grantor is incapacitated. The trustee will take control of your assets during this unfortunate situation and then manage your estate according to your predefined stipulations, including ensuring the trust is run for your benefit as the trustor. This is different from a power of attorney or health care power of attorney in that it details how your assets are to be managed while you are incapacitated, as well as what to do in the case of your death. Living trusts can also be set up for married couples that will set aside funds or assets to provide for the surviving spouse.
Trusts offer greater flexibility in determining how assets are to be distributed in various situations. A living trust can also detail how assets are to be managed in case you are incapacitated. There are a variety of trusts, such as living trusts, which can be revocable or irrevocable. A revocable living trust can be changed while an irrevocable one may not. It may be a good idea to consult an estate-planning attorney for complex situations to ensure your assets are managed in the best possible way. Living trusts will provide greater flexibility to manage your assets in the way you want, including how they are passed on to heirs.
Save Money & Protect Property
Estate taxes and protecting assets from lawsuits or creditors is a concern when estate planning.
Certain trusts may even be arranged to be managed overseas to avoid jurisdiction of some courts. Also, trusts can provide benefits in cases of joint tenancy. Since a trust allows for the assets to be split up as desired, it can be parceled out in amounts or in ways that limit the impact of costs while maximizing associated tax benefits. It is important to consult a legal professional before funding any trust to ensure your assets are managed legally.
Greater Control of Assets
A living trust allows you to decide how your estate will be managed in various situations. This can give much greater control over how real estate and other property will reach beneficiaries compared to a will or other legal documents. A trust can be arranged to payout assets immediately, over time, or when the beneficiaries reach certain conditions. This is especially useful when setting up a trust for children who are not old enough to manage their money.
A living trust can also be used to set aside money for a person who might not be mature enough to handle a large sum at that time, such as grown-up children with mental issues or drug problems. Trusts can also be set up to manage assets for situations where relationships may be complex. Finally, some living trusts can set aside assets in a way that is not counted for end-of-life care and Medicare proceedings.