Why an Online Seller May Desire an LLC for Protection

 

Why an Online Seller Should Consider an LLC

Transcript:

 

Jonathan: Hello, my name is Jonathan Barlow. I’m an attorney here at Clear Counsel Law Group. I actually had a friend that this question came from recently. She told me that she created an online store where she started to sell some little nick knacks, some little crafts that she had been creating. She had starting earning a little bit of money and then kind of … Some of her stuff went viral a little bit and she became very popular. She started making serious money. She asked me, “Do I need to think about creating a business? Do I need to think about creating an LLC or something like that to do my online business with?”

The answer to that question is maybe. It’s up to you. You don’t have to. There is no law that says you have to create an LLC to run your business. You can run it through yourself as an individual. That’s called a sole proprietorship. The business is treated just as you are. There’s no separation between you and the business.

The question of whether you should create an LLC really gets down to the question of accessing risks and rewards of the LLC. An LLC can give you asset protection. Meaning that is somebody had a dispute with the business and say they’ve got a court to tell the business that the business had to pay them money back on a judgment or something like that they would only be able to go after the assets that are in the business in order to pay that judgment. They wouldn’t be able to come after you individually.

 

online seller, small business, Nevada, LLC, Las Vegas

 

If you’re operating as a sole proprietorship there is no protection. Somebody that has a claim against the business could come after your personal assets. They could potentially get to your personal income. They could get to your personal bank accounts in order to pay a business related debt, because you didn’t have that business set up to create that separation.

A second consideration is more of a practical consideration when you’re doing this, which is often having an LLC gives a form or appearance of legitimacy as a business. People think they’re doing business with an actual business and they may want to … Make them more likely to do business with that person or with that business, rather than just an individual person. Those are some considerations you can think about in considering whether it’s time to transition from a sole proprietorship into an LLC. Brian do you have a question about this?

 

Brian: A quick question. Will it be expensive for the online seller to form an LLC?

 

Jonathan:  In the state of Nevada an LLC is not really that expensive to create. The main expense you have to pay is you have to pay the state of Nevada a filing fee to create the LLC. Then on each year, an annual basis, you have to file an annual filing fee with the state of Nevada, right now that’s a few hundred dollars on an annual basis to get that. To start it’s about $400 or $500. On an annual basis it’s about $200 to $250 to do that. It’s not terribly bad, so that’s another consideration. Is my revenue to the point that it justifies creating some more of these administrative type expenses that you’re going to have to pay. If you’re not making a ton of money it may not make sense to put money into an annual filing fee with the state, but if you’re making quite a big amount of money then that may be a very, very small percentage of your business operations and it makes sense to get that protection through the LLC.

If you have questions about your growing business, your growing online business and you’re finding it booming and you want to make sure that you’re protected and your business is protected give me a call here at Clear Counsel Law Group and I’ll answer your questions.

Filing for Divorce with Your Assets in a Revocable Living Trust

 

How to Handle Your Assets in a Revocable Living Trust if You Get Divorced

 

Transcript:

Jonathan: Hello. My name is Jonathan Barlow. I’m a probate and estate planning attorney here at Clear Counsel Law Group. One question that we often get asked in connection with our estate planning practice is: If I’m going through a divorce and my assets are held in a revocable living trust with my spouse, what should I do?

The short answer to that is that first you should make sure you talk to your divorce attorney about that so that that can properly be divided through the divorce process. I’m not a divorce attorney so I don’t know how that part works, but if you’re wanting to make plans because you know you’re going through divorce and you want to make sure those assets are protected, you can make lists and create some separate interest in those assets by going through and designating your interest in those assets and separating out what’s called the community property interest in that property. You can create documents, either a will or another trust, to hold your interest in the community property.

 

Assets, divorce, Nevada, Las Vegas, revocable living trust

 

In short, it’s best to come in and probably create wholly new documents for yourself, whether a wholly new will or a new trust, to hold your interest in those marital assets. Now again, those are all still going to be subject to what happens through the divorce process and the property settlement agreements, the divorce decrees, things of that nature. The judge is going to able to allocate those, but you want to be able to protect your interests, make sure that if something happened to you in the interim before the divorce was finalized should you pass away that your interest in the assets go where you want them to go.

It’s not really that much different than traditional estate planning even if you’re not going through a divorce, because you still have these same questions you need to answer, which is: If I die, where would I want my property to go, whatever that property might be? Whatever that property might be will be determined by the divorce court, but you get to determine where that goes should something happen to you in the interim while you’re going through the divorce process. Brian has a question about this.

 

Brian: Sorry, just to clarify, you’re recommending creating an additional trust to hold your interest in the first trust? Is that correct?

 

Jonathan: That is an option to do that. As one of the co-owners of that trust, you have an equal interest, as does your spouse that you’re divorcing, in those assets in the trust. It’s a community interest, but you have the right to say what happens to your part of that interest. I would probably do it through a wholly new document. Like I said, through a new trust or a new will, just to create separation from the one that you’re currently working with that’s going to be split up anyways when you divorce. You don’t have to do it that way. You certainly could do it through some form of an amendment to the current trust. You could take assets out of the trust, for that matter, and put them into your own individual name.

There are various techniques. The main thing is you want to make sure that you have written down and made very clear your instructions of what you want done with your interests, your property interests, should something happen to you when you pass away, or should you pass away. That’s the best case scenario, best thing to do if you’re going through a divorce, to make it very clear what you want done in that situation. If you have any questions about estate planning, if you’re going through a divorce and don’t know want to do about your assets, certainly give us a call here at ClearCounsel Law Group and we can walk you through this process. We’ll help you review your current trust and make determinations about what you do need to put down in writing to make it very clear what should happen with your assets in the event of your death.

 

How is a Corporation a Nonprofit?

 

 

How the Government Determines is a Corporation is a Nonprofit

Transcript:

Hi my name is Jonathan Barlow. I’m an attorney here at Clear Council Law Group. I often have business clients ask me, “What makes a corporation a not for profit corporation or  nonprofit corporation?” The short answer to that is that you elect to be treated as a nonprofit corporation when you create the corporation with the state. The longer answer to that question is this: what makes a not for profit is simply as it says in it’s name. You operate the business without the intent to generate profit that is paid out to the owners of the business. In other words, if the business does make profit, that profit has to stay within the business. It can’t be passed out as distributions to the owners of the business. The owners are not profiting on the business of the corporation.

 

nonprofit, Nevada, Las Vegas, corporations

 

Now, a lot of people use not for profit corporations or nonprofit corporations in connection with a charitable entity or a charitable organization under the federal tax laws. These are sometimes called 501CS organizations. They are usually created for a charitable purpose. You create the not for profit corporation at the state level. You then obtain the 501CS status from the IRS. Together you’re able to operate a charitable entity. That’s basically the nuts and bolts of how you become a not for profit corporation and how that could be an advantage to people in that situation. If you have any questions about not for profit corporations feel free to give me a call here at Clear Council Law Group and I’ll do my best to answer those questions for you.

 

Is It Necessary to Register Your LLC in Multiple States?

 

 

When Should You Register Your Small Business in Multiple States?

Transcript:

Jonathan: Hello. My name is Jonathan Barlow. I’m a business law attorney here at Clear Counsel Law Group. A question that we recently received was this: If I have a Nevada LLC and I then do business in another set outside of Nevada, do I have to register in that other state as well?

The short answer to that question is yes, you should register in that other state. Now you can continue to keep the home state as Nevada and you would be treated as what’s called a foreign entity in the other state. Typically, if you’re doing business in another state, those state laws will require that those businesses also register with their state, and that therefore they can collect their filing fees and other things that they want from you in order to continue to do business. You could run afoul of the laws of those other states and face penalties, and interest, and problems like that if you fail to register in another state where you’re doing business.

 

Nevada, Las Vegas, register, LLC, small business

 

Now they’re may be exceptions to that rule in those other states. Of course if you go outside of the state of Nevada to do business, I strongly encourage you to talk to a competent attorney in those areas who can advise you specifically about those state requirements. Brian had a question about this.

 

Brian: A quick question. How much business do you have to do in another state before you need to consider registering in that state?

 

Jonathan: That’s a great question. How much business do you need to do? Again, each state’s going to have a different requirement. There may be different amounts of revenue levels before you have to register. There may be exceptions to registration. Nevada has certain businesses that don’t have to register with the state to do business in the state of Nevada. To give you a specific answer to that question, I can’t do that because it’s going to be state-specific depending on what state you go to. Again, you can set it up in Nevada, and Nevada have has very favorable laws related to LLCs and corporations. Makes it a good place to file for your home base, including no state income tax. If you do take your business outside of the state of Nevada, you can talk to me or other attorneys who would be able to advise you specifically about what you should do in that other state. If you have any questions about this, please feel free to to give us a call here at our office and we’ll answer your questions.

 

What to do if You Want to Disinherit an Heir

 

How to Disinherit an Heir

Transcript:

Jordan: Hi, I’m Jordan Flake. I’m an attorney at Clear Counsel Law Group. I do estate planning. Sometimes we have clients who want to disinherit one of their family members. That’s perfectly fine. We understand that sometimes that’s necessary. We get this question: Under what circumstances can I disinherit an heir?

I think first and foremost is really important to reinforce the idea that when we’re talking about your estate planning it truly is your estate planning. The same way that during your life no one can tell you how you should or shouldn’t spend your money, it’s yours, you can do whatever you want with it, that same principle applies in estate planning. It’s your estate. You can plan it however you want. Our job as attorneys is to simply facilitate that and also to let you know if there are some considerations that you might want to think about when making your estate planning.

 

disinherit, probate, estate planning, Las Vegas, Nevada

 

In terms of disinheritance, you can just disinherit anyone at any time. Now, there might be certain circumstances where the disinheritance might not stand up. If you try to disinherit completely your spouse, you might run into a situation where community property laws in Nevada prevent you from really accomplishing all of that. You could disinherit perhaps as to much of your separate property, but there’s going to be community property issues. That’s one of the many things you have to take into consideration.

Another thing is simply that if you don’t specifically disinherit, you can run into problems. Say for example you have three kids. Let’s say instead of disinheriting the third you simply just say, “I want number one and number two to have 50% each.” The implementation is that number three doesn’t get anything. If you do that and you leave out the specific disinheritance of number three, number three can come into court after you pass away and say, “Oh, mom made a mistake. She really just intended for all three of us kids to have it equally. She’s just forgot to list me down there.”

That number three child has a chance of blowing up the distribution scheme. It’s a much better practice to actually use the correct language to specifically disinherit those people who you don’t want to have in there any longer. That’s a good reason to come see an attorney about it. Any follow-up questions on this one?

 

Brian: Does it make sense to put language in the disinheritance as to why you may have taken someone out?

 

Jordan: It may or may not make sense. Estate planning is just about peace of mind. If you don’t want to address it, that’s fine. I have some clients who the reason they disinherit is because they bought that kid a house. It’s not because they dislike them. It’s because they already did a big huge financial favor and they think that everything else needs to go to the other two kids. In that situation, it might make sense to say, “I have previously provided for child number three. Therefore I’m giving my estate to children number one and two.” That might make sense. If the situation is a big traumatic family thing that was the subject of many years of turmoil and dispute, it might not make sense to include all of that in the estate plan. Just keep it simple and disinherit the party that needs to be disinherited. Any other follow-up on this?

 

Jordan: All right. If you are thinking about doing your estate planning and you want to disinherit someone, it needs to be done currently, and that’s a good reason to come see us for a free consultation. We’ll help make sure that you accomplish that.

Nevada Caucus, Iowa, Trump, Bernie, Hillary, Cruz, Jeb

Your Much-Needed, All-Encompassing Caucus Preview! Now with a Small Debate Recap

**Updated With a Debate Recap**

 

To be the man, you have to beat the man.

-Pro Wrestling Proverb

 

 

The First GOP debate of 2016 affirmed my analysis of the race, see below. It is still a two-man contest between Mr. Cruz and Mr. Trump. Fox Business held the first laissez-faire debate of the season last night where candidates could come and go into conversations as they please, and answer only the questions they wanted. In terms of raw entertainment value, this was the best debate by far; each of the candidates is getting better with practice, some improving faster than others.1)Even Jeb!

Mr. Cruz showed last night that yes, indeed, he can win this thing. What you are about to see is the first candidate in the race actually stand up to Mr. Trump:

 

 

That “Constitution didn’t change since September” line was great. Mr. Cruz’s gab gift is such that Mr. Trump even smiled at a few of his quips! If you can’t stand up to Mr. Trump, how will you face Mr. Putin?

Shockingly, Mr. Cruz then found a way to make Mr. Trump sympathetic. Don’t believe me? Watch:

 

 

Five months ago, I would have never imagined Mr. Trump could do that. Unfortunately for Mr. Cruz, he had to burn many a bridge to get himself to his peculiar status as the “insider/outsider”2)Could someone not from Texas pull this off even??. Mr. Cruz may not have enough allies left in the establishment to muster a sufficient challenge to overcome the momentum of the Trump Train.

It’s clear after last night though; Cruz can win.

 

 

Welcome to our Iowa/Nevada caucus3)Yes, some New Hampshire too preview! In only4)haha, yeah only eleven months from now, all this jockeying will be over and the cable news will have to go back to talking about…What did they talk about before? Oh right! Airplanes lost at sea! Weird how no planes got lost over Bermuda during most of 2015; it is as if they know when to get lost to maximize news coverage, or something.

I know you see eleven months noted above and you’re thinking “Pshh, eleven?? Call me in October and I’ll see what these folks are up to.” Ah, my good friend, you do have a little time to head over to Kingman and burn your hard-earned money on an immoral national lottery that the Nevada Gaming Board would never permit5)because of the horrendous odds, but we will need your attention upon your return!

The Caucuses are coming; the caucuses are coming! Shockingly, our two-party political system has produced candidates from each party that differ to such an extent that these primaries will have a significant effect on the political process and the country as a whole. Not only should you be voting the celebrate the sacrifices of the countless others that died for your right of popular political participation, but because you can have a tangible effect on what it means to be an American for five, ten, maybe even twenty years from now.

So we best get this right, eh? This isn’t like those previous caucus seasons when you could pick any of the handful of politicians from one party and the policy result would not differ. You happen to be privileged enough to live in a country where you can actually participate in its future6)At the risk of being mercilessly mocked on the twitter, it is worth taking a moment and appreciating how lucky we are all to live here. You could have ended up in any of the nearly 200 countries in the world, and we are in the richest/most free. Yes, we have many an issue, but it is important not to lose perspective.

Time to get informed then? Insiders tip: don’t tell your coworkers you just noticed last night that we have a caucus in a months’ time. Play it like, “yeah, I’ve been following this stuff this whole time, I just didn’t want to talk about it too much to make y’all feel bad.” People seem to get defensive if you only recently made your 2016 caucus choice, as if your preference has less value than the bro who has been praying that Mr. Trump run for office since 2003.

Above, you see the most recent Nevada caucus polling. There is not much Nevada polling, and frankly, none of it would matter much anyway. We see the press (and Mr. Trump) playing a lot with national polls, yet there is no national caucus to decide the candidate for each party. No, the caucus or primary takes place in a pre-ordained sequence, meaning, in a Samuel Huntington7)Huntington wrote political theory about developing countries saying the the order in which institutions are established matters significantly to the outcome.-esq way, sequences matter! If New York voted first, followed by Texas then California, we would be looking at a completely different race!8)Shout-out to William Vollmann whose excessive use of exclamation points I am currently [poorly] emulating

My point being that the result of Iowa, New Hampshire, and South Carolina will affect the caucus here, so taking snap-shots of the current Nevada polling doesn’t mean that much/have much value. In turn, to understand potential outcomes for the Nevada caucus, we need to glance at the state of the race in Iowa and New Hampshire.

After tossing the coin, the Republicans9)not surprisingly advised by Bill Belichick opted to defer to the 2nd half, so we will start with your friends, Hillary and Bernie.

 

The Democrats and Their Caucus

I haven’t written much about our Democratic friends, as there really wasn’t much news to report. Hillary was up by 20 points, nationally and in all the early states, and there was no reason to presume that Bernie would be able to rise above the 30% plateau attributed to his support in November. Then there was Christmas, New Year’s…and all of a sudden:

 

Whoa! #Bernmentum indeed. I always knew America would take to democratic socialism, it just needed the right, pretty spokesman to do the job10)On a related note, Bernie’s hair is combed in nearly half his television appearances now, much marked improvement. Trends/momentum are important for the caucus, and as you can see above, Hillary must be having nightmares of 2008 all over again (she was up by about the same amount in 2007 December over Obama and Edwards).

I have no insider Hillary knowledge11)I should disclose here that they offered my a job in 2008 but I declined, but my guess is that Team Hillary hoped to hire all the Obama operatives (I watched these folks work in 2008, they are very impressive), and then transfer his popular support directly to Hillary. The plan did not go as hoped. Hillary has been unable to form Hope and Change 2.0 and instead is dealing with all the same issues she had in 2008 with the base democrats, just with new topics. In 2008, the base dems saw Hillary as a war hawk, and her rival campaigns used the base’s hatred of Mr. Bush’s Iraq adventure to defeat Hillary.

Instead of foreign policy12)apparently all the politicians in Washington believe in war in perpetuity now that Mr. Obama has embraced the Bush doctrine, now Hillary is getting attacked for being too moderate on the income inequality, which happens to be Bernie’s pet issue/the issue he speaks best on. The difference eight years later is that as opposed to the 5 competing campaigns teaming up to defeat Hillary in Iowa13)She was that much of a sure-thing then, promise, Bernie is doing it all by himself14)well, along with his coalition of the willing. Unfortunately for Hillary, it looks like the old Edwards/Obama/Biden supporters did in fact come together in a big tent, just against her. Again.

Things are even worse in New Hampshire, Bernie’s next door neighbor:

 

https://twitter.com/RichardAngwin/status/685634979179593728

 

I don’t know about KABOOM, but yes, Bernie is doing well. Does it mean he has got this thing locked up? Not even close. Hillary is up big in South Carolina, and as you saw above, polled very well in Nevada in late December.

The state count could be 2-2 come Super Tuesday. Hillary is not going to go down easy, folks. Take a look at this ad they put out yesterday:

 

 

Pretty effective on the liberals and their hatred of all things gun. Hillary is at risk of the sky falling on her campaign if she does not win one of the first two states. The every-moment-of-the-day15)trademark pending media will just go crazy with their hot-takes and “I told you so’s”.

Yet if the worst occurs, and if she can get out of Nevada with the score 2-2, Hillary is still a -200 favorite to win the nomination, given her fundraising.

Like I said before, your Nevada caucus preference16)This is correct term for a caucus, not “vote,” talk like you’ve done this before really matters!

 

The Republicans and Their Caucus

 

“More than 1,000 words and no Trump talk yet?? I thought you said we were going to ‘Make Caucusing Great Again’?”

Ok ok ok, sorry. Yes, your friend Mr. Trump has turned out to be a much better politician than anyone (besides the Donald) gave him credit for. And yes, like I wrote a few weeks ago, he remains the front-runner.

..But there is a bit of overcast for Team Trump. Of course, though, we have to start with a national poll that Trump dominates:

 

Twenty-eight points! The republicans found lots of folks to run for President, yet none of them have any military or state experience. Imagine if Jim Webb didn’t promote organized labor and registered republican; no way Mr. Trump is up by this much. More than a dozen candidates for President, and the candidate with the most military experience was a JAG lawyer and already dropped out17)Come back Lindsey!. You have to think that if Gen, Petraeus didn’t ruin his career with the book lady, he would have been the nominee for the Republicans, and given all the worry over terrorism, he’d probably be polling pretty well.

But here we are, with a combination of first-term senators, governors, and private sector folks with a combined zero days of military experience. Thus, Trump.

 

But sequence matters with the republicans too! Let’s see what’s going on in Iowa:

 

Mr. Cruz is winning! (probably). Guy is working his tail off in Iowa; I have no doubt he will have visited each of Iowa’s 99 counties by caucus day on 1 February. Iowa voters take their responsibilities very seriously, as they say, they got to kick the tires of a candidate two or three times before an individual would even consider caucusing for him or her.

If Mr. Cruz can pull off the upset and defeat Trump, the sequencing effect likely takes hold (people want to vote for a winner after all). An Iowa win for Mr. Cruz could completely change the dynamics of the race (for him and Mr. Trump only, sorry kids). If Mr. Trump blows out his establishment opponents in the first two states, he potentially18)can’t believe I’m typing this could sweep the field. He’s up Yuge in New Hampshire, South Carolina and Nevada, and if he sweeps the first four states, I cannot imagine another candidate will be able to raise enough money to compete with him. Mind you, Mr. Trump has spent very little19)around 2 million dollars, compare with the 9-figure expenditures of the Jeb PACs, and will likely have sufficient funds available to get the vote out on Super Tuesday.

But if you think Mr. Trump will just allow Mr. Cruz to take away his nomination, think again. By early February, expect all the country to know that Mr. Cruz was born in Canada20)stay tuned for a more in depth discussion on the qualifications for the office of the President. “Natural born citizen” confuses many. What isn’t clear is how well-organized21)in this context it just means, he employs plenty of staff, has lots of volunteers/veterans of the process Mr. Trump is. Look at these articles, for example:

http://www.politico.com/story/2016/01/trump-builds-data-juggernaut-217391

 vs.

Both of these pieces can’t be accurate. Did The Times just find dull Trump supporter in Ottuma to make him look bad? Is The Politico just trying to get back in Mr. Trump’s good graces? We will find out in three weeks. As much as the press loves the “yeah well it’s neat that all them folks came out for the rally, but are they really going to vote” angle22)example , given how well Mr. Obama did in 2008, might be time to give the candidate the benefit of the doubt that if you can get that many folks to attended a political rally in freezing weather, a good number of these folks are likely to caucus.23)Unfortunately for Mr. Obama, he was never able to muster the same enthusiasm for the rest of his party

The future of the Party of Lincoln rests in Iowa. Will they go the way of the Whigs/No-nothings? Will the populist-right break off and form their own party if the nomination is taken away from Mr. Trump? Stay tuned!

If you have a little extra time, I suggest this Guardian piece written by Ms. Abdul pictured below (right), on why she brought her extra-large Koran to a Trump event in Reno. I am happy to report the Reno folks kept their disrespect to micro-aggressions. Yay Nevada.

 

http://www.theguardian.com/commentisfree/2016/jan/13/i-went-to-donald-trump-rally-in-my-hijab-supporters-arent-just-racist-caricatures

Footnotes   [ + ]

1. Even Jeb!
2. Could someone not from Texas pull this off even??
3. Yes, some New Hampshire too
4. haha, yeah only
5. because of the horrendous odds
6. At the risk of being mercilessly mocked on the twitter, it is worth taking a moment and appreciating how lucky we are all to live here. You could have ended up in any of the nearly 200 countries in the world, and we are in the richest/most free. Yes, we have many an issue, but it is important not to lose perspective
7. Huntington wrote political theory about developing countries saying the the order in which institutions are established matters significantly to the outcome.
8. Shout-out to William Vollmann whose excessive use of exclamation points I am currently [poorly] emulating
9. not surprisingly advised by Bill Belichick
10. On a related note, Bernie’s hair is combed in nearly half his television appearances now, much marked improvement
11. I should disclose here that they offered my a job in 2008 but I declined
12. apparently all the politicians in Washington believe in war in perpetuity now that Mr. Obama has embraced the Bush doctrine
13. She was that much of a sure-thing then, promise
14. well, along with his coalition of the willing
15. trademark pending
16. This is correct term for a caucus, not “vote,” talk like you’ve done this before
17. Come back Lindsey!
18. can’t believe I’m typing this
19. around 2 million dollars, compare with the 9-figure expenditures of the Jeb PACs
20. stay tuned for a more in depth discussion on the qualifications for the office of the President. “Natural born citizen” confuses many
21. in this context it just means, he employs plenty of staff, has lots of volunteers/veterans of the process
22. example 
23. Unfortunately for Mr. Obama, he was never able to muster the same enthusiasm for the rest of his party

What You Need to Know about an LLC Operating Agreement

 

 

What to Know about an LLC Operating Agreement

Transcript:

Jonathan: Hello, my name is Jonathan Barlow. I’m a partner attorney at Clear Counsel Law Group. A question that I’m often asked by my business clients is, “What is an operating agreement and why is it important?” In short an operating agreement is the document in an LLC that regulates how the business is operated. It tells us how profits are distributed. It tells us the respective responsibilities of the owners of the business. It tells us who the managers are, it tells us what authorities the managers have in regard to the business. Do they have authorities to make major decisions? Does that require a higher level of decision making? It tells us what percentage the votes are taken at. Does it require a 75% vote to take the action? In other words, it regulates the internal affairs of the LLC.

Now, why is the operating agreement important? That’s a really good question and that goes to one of the main benefits of an LLC. Typically you want to set up an LLC to give yourself asset protection and that means that if the LLC incurs a debt or a liability and somebody sues the LLC they would not be able to come at you individually as an owner to get to your assets in order to pay that debt. It works the other way also. If you individually have a debt, say you hit somebody in the street, you owe somebody a whole bunch of money on a personal injury claim, and they come after you on payment on that. They cannot get to the assets that are held in the LLC in order to pay that debt. It creates a wall of separation or liability protection between those two.

 

LLC operating agreement, Nevada, Las Vegas

 

Why is an operating agreement important in that light? The operating agreement shows, or is one of the ways to show that we treat the LLC as if it is separate from us. We respect it as a business entity, we’re not treating it as just a natural extension of ourselves. By showing the operating agreement, we show, “Hey, we have legal documents that say we are a separate entity. We operate the business according to the operating agreement. We should be treated as a separate entity and therefore, we should have that benefit of the asset protection between the LLC and the individual owner’s.” Brian has a good question here.

 

Brian: Hypothetically, if I was operating, let’s call it Drum Circle LLC, and me and my hippie partners just want to have an oral operating agreement because we trust each other would that have any legal value?

 

Jonathan:  Okay. An oral operating agreement, I’ve never heard of that, but the concept makes sense. You can have an oral contract, just like any other contract. You can orally state this is how we’re going to operate the business. Yes, you can do that and you can have agreements amongst yourselves of what you’re going to do in certain circumstances with the business. Of course, that has dangers and risks, which are disputes about what the agreement was. If a dispute ever arose one person may say one thing and the other may say a different thing. It also becomes difficult as I was talking about when you need to prove that the LLC is separate from yourself. I would be difficult to prove the oral operating agreement. It’s much easier if you have a written paper copy of the operating agreement to show them and say, “Hey, here it is. Here’s our agreement, this is why we treat it as a separate entity.” Never the less, I suppose you could make arguments that no we did treat it as a separate entity and here’s evidence of our oral agreement about how we did that, but in any event I always advise clients to be as formal as possible in creating their LLC and operating the LLC.

If you want help to create your operating agreement or to review your operating agreement to make sure that it complies with good requirements and will give you that asset protection. I encourage to give me a call or any of our other attorney’s here at Clear Counsel Law Group and we’ll do the best we can to help you with that.

Estate Planning with a Car Title only in the Name of One Spouse

 

 

What to do with Your Estate Plan if Your Car Title is only in the Name of One Spouse

Transcript:

Jordan: Hi, I’m Jordan Flake. I’m an attorney at Clear Counsel Law Group. I have a question here: My husband’s name is on the title of a vehicle that I have made all the payments for. If he dies before the title can be put in my name, will the vehicle go into his estate?

That’s a good question. The general response to that is when we’re trying to determine what assets go into someone’s estate, what we look at is whose name is on the title. For this client here, if your husband’s name is on the title of the car and he passes away, then automatically we’re going to assume that that car is part of his estate. Now this is a tough situation because for this individual they made all the payments for this car. You have two response about a better way to handle this.

One is how do we handle this better in advance of this problem. That would be probably with the vehicle, just putting it in some kind of joint ownership. You can put either and/or on the title. You probably would have done well to put or on the title of the vehicle and say husband or wife owns this. That makes it as simple as possible. Obviously, in this case, maybe they didn’t get a chance to do that. The vehicle’s just sitting there in the husband’s name and he’s now passed away.

 

car title, Las Vegas, Nevada, Probate, Estate Planning

 

The next part of the analysis would be what else is in the husband’s estate. Because if it’s just the car, we may be able to do a small, simple DMV form affidavit of entitlement that basically gives the wife the title of the car without any problems. If there are properties and bank accounts and investment accounts in a larger estate, then basically dealing with that estate is going to have more procedure, more requirements. That becomes a very fact-intensive analysis.

In any event, though, if the spouse was the one that make all the payments, if the wife in this scenario was the one to make all the payments, we should be able to get those basically back in her pocket one way or another. Any other questions on this?

 

Brian: Back to the DMV affidavit. If the wife had not made all of the payments, but let’s say three-quarters of the payments, is that still a possibility?

 

Jordan: Here we’re assuming that maybe it’s an intestate estate. Everything would go to the surviving spouse in this scenario if there is no will. If there is a will or if there’s a trust, that can affect maybe the distribution, but here it wouldn’t matter if the wife had made none of the payments. If there’s no will, state law says everything goes to the surviving spouse. It really wouldn’t matter if the spouse had made all or none of the payments in that case.

In any event, though, if you come across a situation like this, call me up. We can discuss it. We can meet for a free consultation. I’d be happy to walk you through this or any other type of estate-related question you might have.

Protecting Your LLC: How to Transfer the Rights to a Family Member

 

 

Transfer Your Interest in an LLC to a Family Member

Transcript:

Jonathan: Hi, my name is Jonathan Barlow. I’m a partner attorney at Clear Counsel Law Group. We handle estate planning and we handle business planning. The question we have today that I’m going to answer blends these two areas in one question. The question is, how can I transfer an ownership interest in my LLC to a family member? There’s basically two times that you might think about a transform happening. One, while you’re alive, and two, after you pass away.

First, if you think about wanting to transfer an ownership interest while you’re alive, I highly recommend that you do this as formally as possible to make it very clear that you did both intend to transfer the interest and that you actually did transfer the interest. That can be done formally through a simple document. We call it an assignment of ownership interest. In that document, you simply recite that you are an owner of the business in such and such a percentage, and that you hereby or give such and such as percentage or amount to the person you want to give it to. Sign it, date it, have it notarized. That actually acts as a formal transfer of ownership interest. It formalizes it and makes it very clear what your intent was.

 

LLC, transfer, estate planning, Las Vegas, Nevada

 

After you pass away, if you have an intent to transfer the interest after you have died, you want to make sure you also do that very formally. You could that either in a will or in a trust. If you do it through your will you’re probably going to have to … or your family member will have to go through probate in order to get their interest in your business, which could delay the operation of the business while that process is happening. The best way to plan for an after-you-die transfer is through a trust.

In your trust, just like any other asset, you can specifically list 25% of my business or half of the business or all of the business to be transferred to my son John when I pass away. That can happen pretty easily and quickly after you die through the use of a trust. Those are the two best ways to do that and transfer those ownership interests. Brian has a question about this.

 

Brian: What happens to your LLC if it goes into probate?

 

Jonathan: That’s a good question. If the LLC, which becomes an asset of your estate when you die and in order to get it transferred out of your estate to whomever’s going to inherit it, it goes through probate, what happens to the business? That’s an interesting question. If there’s not already other business managers operating the business, if the person who passed away is the only manager, the personal representative or executor of the estate can be appointed with authority to continue the business of the LLC. The court would grant that person, the executor, authority to step in the shoes of the manager of the business and continue with the operations of the business while the probate is occurring until it is transferred out of the probate estate to the heirs.

That may or may not be a good idea. That’s also a reason why you want to think about using a trust to avoid that potential process. Because that executor may not have the business acumen that you would want them to have in order to operate your business. Thus again, using it through a trust allows you to be much more formal and specific about how you want that ownership interest to transfer, and the management interest as well. If you have questions about your LLC, about your ownership interests, how to transfer those, I encourage you to give me a call or any of the attorneys here at Clear Counsel Law Group, and we’ll do our best to answer your questions.

The Rights of a Beneficiary of a Trust

 

 

Does a Trust Beneficiary have the Right to a Copy of the Document?

Transcript:

Jordan: Hi, my name is Jordan Flake. I’m an attorney at Clear Council Law Group, and one question that we get from some of our clients. Sometimes we’ll get a phone call from somebody who’s the beneficiary under their father and mother’s or their parents trust, and they’re sitting there saying, “I know my dad is going to leave me some property through his trust, but I don’t really know what it is he’s leaving me, how much, when I get it.” Sometimes one question that we get a lot is can I demand a copy of that? Basically, am I entitled because I’m a beneficiary under this trust, am I entitled to receive a copy that I can then review?

 

Living Trust, beneficiary, Las Vegas, Nevada, Estate Planning, Probate

 

The answer is while the grantors, or the creators of the trust, are still alive, then beneficiaries don’t have a right to receive at that point any kind of copy or any kind of documentation. Basically the law protects a grantor’s right to just go back and change documents in a revocable trust context. You can’t while they’re still alive. Now after they pass away, Nevada law does allow you to receive a copy of those provisions that directly address and affect your beneficial interest, your distribution. You can request a copy of that from the trustee. You can’t often get the entire trust, but you can at least get those provisions that directly affect you. Again, here in this situation we’re talking about after the grantors have passed away. Any follow up question on that?

 

Brian: The follow up question can a grantor put language in the trust where the beneficiary is allowed to see the language?

 

Jordan: Yes. In fact, grantors can always just … If you’re creating a trust for your kids and they say, “Hey, Mom, Dad, I want a copy of it.” Then grantors can always just give a copy to whoever they want. It’s their trust. They could also put language in there that says, “Under all circumstances, notwithstanding any of the foregoing language in this trust, I desire that my beneficiaries all have a copy of this trust.” You can really customize that to your family circumstances. Sometimes you might think it would be best for all of my beneficiaries to have a copy of this and I want to make sure that that happens. In any event if you’re listed as a beneficiary in your parents trust and you’re wondering or maybe you’re worried about whether or not … what your beneficial interest is in that trust and you just want to know, that’s a great question for us. Come to us, bring any documents that you might have, and whether they’re alive or deceased we can reach out, make inquiries, and figure out what you’re entitled to.

 

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