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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.

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.

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?

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.

 

What Happens to Your Estate Plan if You get a Divorce?

How a Divorce Affects Your Estate Plan

Transcript:

Hi, I’m Jordan Flake. I’m an attorney at Clear Counsel Law Group.

One of the questions our law firm gets a lot is: What happens to my estate planning if I’m in a divorce?

You can imagine a situation where maybe a husband and a wife did their estate planning, maybe they got a trust or some wills or power of attorney documents, and then a few years later there’s trouble in paradise and they have to go file for divorce.

Do they have to, in that situation, go through all of their estate planning and unwind and undo everything and reexecute new documents?

The answer is they probably should do that, but the reality is Nevada has a law that makes it so that after a divorce all of the provisions of your estate planning that include either your husband or your wife who is now your ex-husband or your ex-wife are considered invalidated by the divorce.

Those documents are largely invalidated by operation of law.

However, it also makes a lot of sense in that situation to come back and see your estate planning attorney or just bring it to us so that we can take a look at it and see what else might need to be done.

That’s normally the process.

Brian, any follow-up questions on that?

Brian: Can you plan for a divorce in your estate plan?

Jordan: You could. You could say in the event of a divorce, this, this, and this.

It’s an interesting question as to whether or not that would be invalidated under the law.

I think it wouldn’t be because that would be like a prenup where it was basically, listen, this contemplated our divorce so you could put provisions that said, listen, this is how it’s going to go, but in the event of a divorce, this is how we want it to go.

That language might be given the same legal validity as your basic pre-nuptial agreement. In any event.

If any of these situations are affecting you, come in and let us do a free consultation where we just sit down and review what you have and review what you want to accomplish.

We’ll make sure we get it done.

 

What Are the Record-keeping Requirements for an LLC?

 

 

How to Keep Records for Your LLC

Transcript:

Jonathan: Hi my name is Jonathan Barlow I’m a partner attorney at Clear Counsel Law Group. One of the main things that we do here is advise people about businesses and about operating their businesses. A lot of people in Nevada have an LLC for their business entity and they often ask me, “What are the record-keeping requirements for an LLC?” It’s a really important question for LLCs because that is actually one of the main differences or one of the best benefits of an LLC and a difference from a corporation. Under a corporation, you typically have to follow strict recordkeeping requirements which include holding an annual meeting of shareholders, holding an annual meeting of the board of directors and then keeping minutes and resolutions related to those meetings and you have to have those in your documents and books at the end of each year.

The LLC disposes with those requirements. You don’t have to do them. The LLC can do so if it wants to but it’s not required. So then, what are the recordkeeping requirements for an LLC? Best practices are to make sure that you’re keeping good books and accounts and records related to your financial dealings with the LLC. You need to be able to show that the LLC is treated differently from yourself and that you’re not co-mingling your personal assets with business assets, so you’re not paying personal expenses with business money so you need to make sure that you’re keeping good records related to your finances.

It’s also important for an LLC to keep good records of who are the managers and members or owners of the LLC. Managers are those persons who are authorized to act on behalf of the LLC in a management capacity. You want to have good documents that reflect that. You also need to keep good track of who the owners of the LLC are and what their ownership percentages are. You want to keep a good membership log, make sure you’re keeping up to date on the percentages. Heaven forbid you ever have a dispute about who owns what with the LLC and you never documented it. So while the recordkeeping requirements are a little bit less with an LLC, it still is very important that you treat the LLC like a business, keep good records about your finances, about the members, about the managers, about the activities of the LLC so that you avoid any liabilities or problems down the road with the LLC.

We have a question from Brian who is also interested in business law.

 

Brian: What happens if you don’t … God forbid, they don’t follow your advice and you don’t keep these records. What will happen to you?

 

Jonathan: That’s a good question, Brian, and my clients always follow my advice to the T, I’m sure, but in the event that they didn’t follow my advice and they didn’t do some of these things, they did’t keep good financial records, they didn’t keep good record of who owns what with the LLC, that’s litigation waiting to happen. They’re waiting for someone to sue them and have a problem. The worst case scenario is with the financial records, if you can’t prove that you treated this business separately from yourself or if the financial records show that you paid your personal mortgage out of the business account or that you bought your groceries with the business account or that you’re mixing the money back and forth, the worst case scenario is that does what’s called pierces the veil. It allows a creditor to get into the L.LC to satisfy judgment against you. In other words, it makes all the assets of the L.LC available to somebody to whom you owe money potentially.

Also with records related to ownership percentage, again, if a dispute ever arose about who owns what in the L.LC and who has what percentage, it could become very difficult to prove what your percentage is and what their percentage is and it asks for a lot of litigation in court and expense in that. I encourage all my clients to make sure they keep up on those things, make sure they keep good records for their L.LC and if you have any questions about how to do that, how to run your L.LC properly, how to operate it properly, feel free to give me a call here at Clear Counsel Law Group and we’re always glad to help you.

Under What Circumstances Do You Need a Guardianship?

 

 

How Do You Know When You Need a Guardianship?

Transcript:

Jordan: Hi, my name is Jordan Flake. I’m an attorney with Clear Counsel Law Group. Our law firm practices estate planning, probate. We also practice guardianship. One of the questions we get is: Under what circumstances do I need a guardianship? When can a guardianship be granted? When we’re talking about guardianship, really that arises in two contexts: either guardianship of a minor or guardianship of an adult.

Guardianship of a minor oftentimes can be like a family law issue. Most of the time when we’re talking about guardianship of a minor we’re not talking about physical disabilities or incapacities, although that can be the case. We’re talking about the fact that they need a guardianship because they’re too young. Most of our practice focuses on this other scenario, adult guardianship, where the issue is, hey, we have this elderly individual who doesn’t have the ability to care for themselves. How do we know who should make decisions on their behalf?

The answer to that question is first we try to find out whether or not they have estate planning documents, because normally if you have a full and robust estate plan, you will never have to worry about guardianship because you will have previously designated who will take care of you in the event of your incapacity. If you don’t have an estate plan, then we need to make a decision for that elderly person, for that incapacitated individual. We need to essentially say we’ve got to go down and get somebody appointed to basically have full authority to say what medical treatment they receive. How do we use their finances for their benefit?

Really the first relevant question is capacity. Are they able to make decisions on their own? The guardianship court requires us to show a medical opinion regarding capacity before granting any type of guardianship. If we go and we say Ms. Jones is 82 years old, she can’t take care of herself, she doesn’t at this time in her life have her mental capacity, the court’s not just going to take our word for it. They’re going to require us to provide a doctor’s note saying that Ms. Jones can’t take care of herself. Those are some of the prerequisites and considerations when we’re thinking about guardianship. Guardianship can be helpful or even necessary if you have an elderly person who needs care but we don’t have a way to access their property or we don’t have a way to establish who has the right to make decisions on their behalf. Bryan, does that cover it there or did you have other follow-up questions about guardianship?

 

Brian: You covered it very well. A couple follow-up questions. If a person is worried about her own capacity, can she acquire the guardian on her own?

 

Jordan: You can actually consent to a guardianship. If you want to say, “Listen, I have some concerns about my own capacity, and at this point maybe a power of attorney document or the right estate planning documents wouldn’t be held valid if I were to execute them because I have some concerns about my own capacity,” in that scenario you can consent to a guardianship and say, “Listen, I’m concerned. Therefore, I want to appoint Brian to be my guardian.” No? No, you don’t want to be my guardian?

 

Brian:  No.

 

Jordan: The better situation and the more ideal way of handling this is while the skies are sunny and clear, while you have your capacity, you should be executing power of attorney documents that say, “In the event of my incapacity, here are the individuals who I want to serve as my agent, my power of attorney agents.” You can think of that the same way as you think of a guardian. This person, one, two, three, maybe list three people. Put their address, phone number, email address. That’s a much better way to go than guardianship. Other questions?

 

Brian: With the robust estate planning described, how is guardianship triggered? What needs to occur before power of attorney is taken from the individual and given to the third party?

 

Jordan: Let me see if I understand your question correctly. When we do estate planning, we prepare these power of attorney documents, and we recommend to our clients, “Listen, give a copy of the power of attorney documents to your agents. If you’ve designated Brian to serve as your agent for power of attorney, give Brian a copy. That way Brian knows if you have something happen here, you’re in an accident and you become incapacitated, he needs to step up and make medical decisions on your behalf.”

It should be people who are close to you, people who you trust, people who you know will act in your best interest, and people who generally will be aware of what’s going on in your life. That’s why we always say estate planning is for everyone. You may not be rich. You may not have a lot of kids or be married. All of us have to worry about the possibility of incapacity at some point in our life. If you want us to address this with you, please come sit down with me for a complementary consultation. We’ll go over your different options for your power of attorney documents so that you can avoid that guardianship scenario. Thank you so much.

Clear Counsel Law group

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