Avoid Probate

Avoid Probate: What is a Trust?

2009-11-09T12:40:00.000-08:00

I had several clients ask about setting up trusts last week and was surprised at how little they knew about what a trust is and what a trust does. I have done work for them in the past and just assumed they knew more about Estate Planning than they did. It served as a reminder that sometimes as an attorney I get "institutionalized" when it comes to what I do for a living. By "institutionalized" I mean I often get so caught up in practicing Estate Planning Law that I begin to assume everyone knows what I know about it. I thought back to how much I knew about Estate Planning before I went to law school and even several years after law school. Not much. So for the likely many of my readers who don't know what a trust is, here goes.

A Trust Is...
A trust is bascially a set of instructions that specifies how you would like your assets to be managed and distributed to your beneficiaries. A trust is created by a legal document that names an individual or institution to manage the assets placed in the trust. In general there are two types of trusts:

(1) Trusts that are implemented while you are alive (i.e., revocable living trusts or inter vivos irrevocable trusts). When you establish a living trust, you reregister your assets to the trust, and the trust becomes the owner of your assets. You can name yourself as trustee. When you die, the trust assets avoid probate; and

(2) Trusts that are created through your Will after you pass away (i.e., testamentary trusts).

Why Create A Living Trust?
There are two basic reasons to create a living trust. First, to maximize your ability to control the management and distribution of your assets. There are many advantages to retaining control over your assets through a living trust. Some of these advantages include naming someone to manage your assets in case you become incapacitated, controlling when your assets will be distributed to your heirs, and maintaining privacy of your finances even after you have passed away.

The second reason to create a living trust is to prepare for possible tax consequences. The IRS treats transfers of assets for individuals at death as either nonmarital or marital. A nonmarital transfer is taxable, a marital transfer is not.

Enhanced Life Estate Deed a/k/a Lady Bird Deed

2007-09-11T13:12:00.000-07:00

One of my clients is an elderly widow. She recently contacted me with several concerns about her estate. Her primary concern was that she wanted to keep her home out of probate when she passes away. Like most people, she doesn't like the idea of her property being tied up in legal limbo for months before her beneficiaries (i.e. her daughter and two sons) take possession of the home. She was advised by another attorney to set up a trust, put her home (her only asset of real monetary value) into the trust and then manage the trust until she passes away. She brought the matter to me as she does with all of her legal concerns. I advised her that a simpler way for her to handle the matter might be to execute an "Enhanced Life Estate Deed" also known as the "Lady Bird Deed" (named in honor of former First Lady, Ladybird Johnson) or a "Transfer on Death Deed."

What is an Enhanced Life Estate Deed?
An Enhanced Life Estate Deed is a document that would deed my client's home to her children but reserve for my client a life estate coupled with the ability to sell the property at any time. This is called an "Enhanced Life Estate." In layman's terms, this means that (1) my client still owns the property; (2) my client can sell the property at any time without notifying her beneficiaries; and (3) if my client never sells the property, the house will pass directly to her beneficiaries after she passes away without going through probate.

Florida, Texas, Ohio, California, Kansas and several other states now accept this form of conveyance. In these states it is a recommended alternative to the traditional life estate deed. Of course, where a life estate can result in unwanted capital gains taxation, it should not be used, and other forms of planning should be considered (such as a living trust).

Lady Bird Deed v. Quitclaim Deed
In the past, people have used a Quitclaim Deed in an attempt to avoid probate. The Quitclaim Deed was supposed to make things easier for beneficiaries. A Quitclaim Deed deeds property to one's children while the parent retains a life estate interest. The problem with the Quitclaim Deed is that my client would not be able to sell or encumber (e.g., mortgage) her property without the consent of her beneficiaries.

Further, creditors of my client's beneficiaries could obtain an enforceable lien against her home because the beneficiaries could not claim the home as homestead property. Also, spouses of my client's beneficiaries could claim an interest in the property, either upon their husband's death or in the event of a divorce.

The Enhanced Life Estate Deed does not share the above pitfalls. For more information about the difference between the Enhanced Life Estate Deed, Warranty Deed and Quitclaim Deed read my article here.

Other Benefits to a Lady Bird Deed
The Enhanced Life Estate Deed has several other benefits including:
(1) bypassing probate;
(2) it does not result in capital gains for the beneficiaries because they will not receive any value until my client passes away. When she passes away, her beneficiaries take the home at a "stepped-up basis" - not my client's original basis. A "stepped-up" basis is the value of the property on the day of my client's death;
(3) it does not open up the property to the beneficiaries' creditors during my client's lifetime because the beneficiaries have no interest until my client has passed away without selling the home;
(4) it allows my client to sell her home at any time, compared to a regular life estate where she would not be legally entitled to sell her home.

Language Creating the Deed
Attorney's Title Insurance Fund has recognized certain specific language that must be included to validate an Enhanced Life Estate Deed. Without the specific language the deed will be declared invalid for transferring the real estate in the manner outlined above. I charge my clients $450.00 to prepare and record the deed.

You can purchase My ENHANCED LIFE ESTATE DEED/LADY BIRD DEED TEMPLATE Here for $29.99.

Divorce: Arizona Divorce Proceedings

2007-02-25T20:24:00.000-08:00

I have a friend who moved his family (consisting of his wife and two elementary school age children) to Arizona in January of last year. He did so over his wife’s objections to leaving her extended family. About two months after moving to Arizona his wife grew too homesick to stay any longer. One day while my friend was at work, his wife packed her bags, loaded up her car and moved herself and their children back to Florida. Within a week after his wife left him, my friend decided to file for divorce.

Although I am not licensed to practice in Arizona, my friend contacted me about how to go about filing for divorce. His first question concerned whether he could legally file for divorce in Arizona when his wife and children now lived in Florida. His second question dealt with grounds for the divorce. Specifically, whether his wife leaving him for a little over a week and telling him that she would not return constituted grounds for divorce. His third question was whether he was required to obtain an attorney to represent him in his Arizona divorce proceeding.

Arizona Divorce: Residential Time Limits
The answer to his first question could be found with a simple appeal to the Arizona Divorce Statute. In Arizona, either spouse must have lived in Arizona for at least ninety (90) days prior to filing for divorce. This meant my friend would have to either file in Florida or wait an additional three (3) weeks before filing.

Arizona Divorce: Grounds for Divorce
Unlike some states, Arizona does not require that one of the spouses prove blame or responsibility in order to end the marriage unless the marriage is a “covenant marriage.” Instead, the court is simply required to answer in the affirmative the question of whether the marriage is "irretrievably broken." “Irretrievably broken” means the parties have differences or disputes that cannot be settled which are so serious that they have caused the marriage to totally and completely break down.

As my friend did not have a “covenant marriage” this post does not address that type of marriage. Suffice it to say that Arizona divorce law prohibits a court from granting a divorce after such a marriage unless one of the parties can prove adultery, abandonment, physical abuse or regular substance abuse or both spouses agree that the marriage should end. A “covenant marriage” is a marriage where both parties agree to limit grounds for divorce prior to their getting married.

Arizona Divorce: Self Representation
Arizona did not require that my friend obtain an attorney to file his divorce papers. However, I advised him that in addition to being without the benefit of an experienced attorney to guide him through the process, he would be required to abide by the same statutes, rules and procedures as an attorney would. This includes the proper and timely filing of legal documents, observing proper courtroom decorum and having at least a working knowledge of the divorce process. In the end, he chose to retain an Arizona divorce lawyer.

Another legal fact of interest is that in Arizona the court cannot grant a divorce until at least sixty (60) days after the other spouse is first served with the original court papers.

Enhanced Life Estate Deed Revisited

2007-02-17T19:52:00.000-08:00

Click on the Picture below to read my article on the Enhanced Life Estate Deed/Lady Bird Deed. You can also purchase the Enhanced Life Estate Deed/Lady Bird Deed Here.

Mediation: Small Claims in Florida

2007-02-05T13:50:00.002-08:00

This topic may seem a little dry to some of you so if you want to bypass the legal information and go straight to the somewhat humorous anecdotes, skip down to the paragraph titled "Some Words of Caution."

And now for the post.

I've had several people e-mail me with questions about Florida's lawsuit procedures in civil "small claims" court cases. In response, this post is intended to shed a little light on one particular area of Florida Small Claims Court: Mediation. If you are suing or have been sued in a Florida Court I hope this post is helpful.

Three Separate Divisions
As a general rule, Florida's Civil lawsuits are handled by one of three separate divisions, most often depending on the amount of money involved in the case: (1) the Circuit Civil Division, (2) the County Civil Division, or (3) the Small Claims Division. Cases where the amount sought in the suit is $5,000 or less usually belong in the Small Claims Division.

Small Claims Mediation (Pre-Trial)
It is always interesting to me to see the expression on a defendant's face when he or she first finds out that most of the Florida Rules of Civil Procedure DO NOT APPLY in Small Claims court. To begin with, discovery (i.e. depositions, interrogatories, production requests, etc.) is generally either extremely limited or altogether prohibited. If you file suit in Small Claims court thinking you are going to be involved in a full-blown, knock-down, drag-out fight you need to think again. "A pound of flesh nearest the heart" has very little place in Small Claims court. Short, sweet and to the point is what Small Claims is all about.

The Nuts and Bolts of the Small Claims Process
It has been my experience that Small Claims court is primarily designed to help the two parties work their case out prior to trial. This design is typified by the process itself. Once suit is filed the Small Claims court (often the same judge who runs County Civil) sets a Mediation, or Pre-Trial, date. The Pre-Trial date requires both parties to show up on a set date, sit down with a mediator and try to work things out.

In practice it works like this. Suit is filed and the defendant is served with the papers. The suit papers contain a Pre-Trial date instructing both parties to appear before the Court on a certain date. There are usually a number of other cases and parties scheduled to appear on the same date and at the same time. The judge will then call roll (yes, just like elementary school) and the parties answer "present," "here," or some other respectful reply to the judge. If both parties to a case appear, the judge will assign the case to a mediator. The parties will go into a separate room in the Courthouse and try to work their case out. If the case cannot be worked out, the parties will then return to the Courtroom. The judge then assigns a trial date (usually within 30-60 days). The judge will not take testimony at Pre-Trial and no witnesses are required.

Some Words of Caution
The following things should be avoided with regard to Pre-Trials:

(1) Do not leave your cell phone turned on while in the Courtroom. I saw a guy get stared down, yelled at, held in contempt of court, handcuffed and taken to jail all because of his cell phone. In all honesty, if the guy had not answered the phone in open court only the first two would have happened. The judge was clearly not running for re-election;

(2) Do not answer "Uh-huh" when the judge calls your name. You guessed it-stared down and yelled at;

(3) Do not tell the judge "Judge, you don't know what the H--- you're talking about." The judge will likely skip staring you down and yelling at you and just send you straight to jail; and

(4) Do not miss the Pre-Trial. If you miss the Pre-Trial the judge will dismiss the case (if you are the Plaintiff) or enter a judgment against you (if you are the Defendant).

Lawyer Ethics: An Ethics Post Revisited

2007-01-25T10:09:00.000-08:00

The last two weeks have been about as hectic as any I have had in recent months. A good time to revisit the archives. Check out this post on Lawyer Ethics. The post started a buzz on several different blogs the week it was written dealing with lawyers and ethics.

An apt summary of the post is that sometimes the non-lawyer and lawyer worlds clash as to what constitutes the right ethical decision. The primary case cited in the post involves an attorney faced with whether to tell the grieving parents of two murdered children where the children's bodies were buried. The attorney knew because his client murdered the children and told the attorney where the bodies were located.

After reading the above facts, what would you do if you were the attorney? The answer likely depends on whether you have attended law school and, if so, how well you did in your Ethics 101 class.

Divorce: A Mediation Post Revisited

2007-01-15T13:32:00.000-08:00

I don't think "Find A Divorce Attorney" is at the top of most people's New Year's resolutions, but that seems to be the way it is going in my circle of friends. In addition to my friend in Arizona last year, several others have brought the topic up of divorce lately. I thought it would be a good time to revisit a post I wrote on Divorce Mediation. An apt summary of the post is that more often than not both parties to a divorce will be happier if most of the issues can be taken care of through mediation.

My advice: give mediation a try, especially if children are involved.

Thanks for the Shout Out Inter Alia

2007-01-15T12:45:00.000-08:00

Like many of you I love reading other legal and political blogs. One blog I check often is Inter Alia. I noticed that Inter Alia gave a shout out to this blog yesterday. Thanks Inter Alia.

If any of you have a legal or political blog you would like me to exchange links with, let me know.

Signed,

Nolelaw

Labor Law: Employee or Independent Contractor?

2007-01-10T07:51:00.000-08:00

One of my colleague’s clients recently found itself in trouble with the IRS and its insurance company for incorrectly designating several of its employees as independent contractors. The employees had been with the company for at least a year when the company decided to restructure the relationship to “save money.” The company laid the employees off only to hire them back as independent contractors the following week. The idea was that by designating the employees as independent contractors the company would not have to pay payroll related taxes and could cut down on the amount it spent on insurance benefits.

Several months after designating the employees as independent contractors, one of the employees wrecked his truck while working for the company. The company was held liable for the accident, but because it did had not identified the driver as an employee for insurance purposes it was prohibited from claiming coverage under its insurance policy.

In addition, it is my understanding that the company has recently had penalties levied against it by the IRS for failing to pay employee related taxes.

Autonomy versus Control
The company failed to understand the biggest factors in distinguishing an employee from an independent contractor: (1) the ability to control how the individual performs the job; (2) whether the individual uses his own or the company’s equipment; (3) how the individual is paid; (4) where the individual works; (5) when the individual works (i.e. set work day schedule).

Recommended Precautions
What could the company have done to avoid problems with its insurance and the IRS? Consider the following:

The company may have been able to address the above factors and ensure the individuals received the treatment the company wanted them to have by (1) having the individuals sign an agreement acknowledging their status as independent contracts; (2) requiring the individuals to obtain their own business licenses, tax identification numbers, places of business and other clients; (3) allowing the individuals to control the manner in which their work was performed (i.e. does the company give “instructions” to the individuals or merely make “suggestions.” Instructions are indicative of an employee, Suggestions are indicative of an independent contractor); (4) not hiring former employees and designating them as independent contractors. The company may have considered hiring the individuals through an employment agency.

When In Doubt, Designate As An Employee
But probably the most important precaution the company could have taken is to have treated the workers as employees when it had doubts as to their correct classification. The company may have even asked the IRS to give an opinion on the classification. Trust me, it would have been far better for the company to have taken the above steps than to attempt to clean up the mess they are now in.

Labor Law: Hiring Checklist

2007-01-02T06:11:00.000-08:00

2006 ended with one of my small business clients running into a flury of employee problems. Employees on drugs, allegations of sexual misconduct in the workplace and theft to name a few. One of his employees was brazen enough to use the business gas card to fill the tanks of ten personal vehicles. I guess the guy thought it was some type of "friends and family plan." The business caught him because his purchases maxxed out the credit limit of the card and because he purchased the gas at 11:00 at night when all of the company vehicles were tucked safely in the company parking lot.

It is my opinion that the employee problems the company has run into is largely a result of its hiring practices. It seems my client is still trying to run his 10 employee business the same way he ran the business when he had only one employee.

In addition to assisting him with putting together an official Employee Handbook, Confidentiality Agreement and Non-Compete Agreement I suggested he consider the following checklist when hiring employees:

Employee Hiring Checklist

1) Draft a written job description for the position you want to fill;

2) Let current employees review the job description and make suggestions on possible alterations;

3) Screen applicants by requiring them to provide a resume with references;

4) Write down interview questions, interview applicants and evaluate the effectiveness of the questions after interviewing each applicant;

5) Put together an applicant appraisal form and complete the form after each interview;

6) Call references (employers, schools, etc.);

7) Perform background checks (DMV, credit, criminal background, etc.);

8) Ask the applicant about any confidentiality agreements he or she may have signed with former employers.

9) Provide the applicant a written offer or written rejection letter;

10) Make all offers contingent upon successful completion of drug, skill, physical and psychological testing.

11) Write out the new employee's terms of employment and have the employee sign it prior to beginning work; and

12) Have the new employee review and sign your employee handbook, Confidentiality Agreement, Non-Compete Agreement and any other applicable agreements.

You may have other items you would add to this checklist. Feel free to copy this checklist and add to it as best suits the needs of your business.

Estate Planning: Will or Intestate Succession

2006-12-22T12:51:00.000-08:00

This post is intended to give a brief explanation of the use of a Will in transferring property at death. Use this post in conjunction with my posts on the Enhanced Life Estate Deed, the Revocable Transfer On Death Deed, Life Insurance Proceeds and the Lady Bird Deed.

What Is A Will?
A Will is a document you can execute which transfers property to your beneficiaries when you die. A Will may be revoked or revised at any time up until the moment you die. It does not grant any beneficiary a right to your property until you die. The downside is that your beneficiaries are usually required to wait a period of time after your death before they can apply for ownership of your property.

Probate Administration
Probate Administration is a process whereby a personal representative is designated to administer your estate. You may (and probably should) designate a personal representative in your Will. It would be wise to designate multiple back up personal representatives should the person you originally designate be unable or unwilling to perform.

Probate administration requires the determination of your heirs or devisees as well as the settlement of your debts and taxes. The process involves court oversight for resolution of disputes. All proceedings are a matter of public record and, therefore, may be subject to public scrutiny. The process usually takes at least six (6) months after the decedent’s death and the cost is usually based on the value of the estate involved.

Small Estate Proceedings
If your estate is of relatively small value, it may pass by Will without probate administration. The gross value is usually placed at less than $100,000 to be eligible for small estate proceedings. Real property beneficiaries are usually required to wait a period of time before they can use this procedure (usually around six (6) months) to give other potential claimants or creditors time to file a claim against the property.

Caution
There are a number of requisites that must be met before a Will can be valid. Each state has different requisites. If your will is not executed with the requisite formalities your state will most likely not recognize the Will and it will then become subject to intestate succession. Be sure to contact an Estate Planning attorney when preparing your Will.

A Shout-Out To My Boys

2006-12-20T05:13:00.000-08:00

Every now and then I use this blog to post something family related. This is one such post.

Stephen's Latest Triumph
About a year ago my oldest son Stephen (now 10) was disappointed when he was passed over for the All-Star Soccer Team. He had worked hard on his soccer skills the previous summer and had certainly improved as a player. If I had to guess, I'd say he was probably on the bubble last year to make the team.

But this year was different. After last year's disappointment, Stephen again worked hard on dribbling, passing and blasting the ball. He scored an average of 2 goals each game in his league and was one of the first kids picked for the All-Star Team. His All-Star Team made it to the district championship game which determined which team was to go to the state tournament.

The team they played against in the championship game was very good. Within 5 minutes the other team had scored three times. At halftime the score was 4-0. Let me say here that this is not one of those triumphant comeback stories you see in the movies. No, when the whistle blew to end the game the final score was 7-1. The one point our team did score was scored by Stephen. Although I am certain Stephen would have traded his score for a win it was nice to see him juke the fullback and blast the ball into the corner of the net.

Jacob's Latest Triumph
Yesterday my 7 year old son, Jacob, brought home an award with the words New School Hula Hoop Record - 49:18. I thought it a little odd that the school had a Hula Hoop Record and that noone had been able to hula hoop for longer than a minute. I congratulated Jacob on his triumph and he said "Dad, can you believe I hula hooped for 49 minutes and 18 seconds." I told him it was 49.18 seconds; not 49 minutes 18 seconds.

Jacob continued to insist that it was in fact 49 minutes but neither my wife nor I really thought he knew what he was talking about. I mean he is a first grader and what do they know. I reasoned that even if it were possible for him to hula hoop for 49 minutes, no teacher would stand there and let some 1st grader keep hula hooping when there were other subjects to teach.

This morning when my wife dropped Jacob off one of the teachers approached the van and asked her if she was proud of Jacob hula hooping for 49 minutes. The teacher said she had actually watched him set the record and that she had even fallen asleep at one point. Boy did I feel stupid when my wife called and told me that Jacob was right all along. Jacob won't let us get out of this one without eating a little crow.

A Good Time to go to Law School

2006-12-15T06:21:00.000-08:00

A recent poll taken by the Florida Bar shows the average income of lawyers in Florida has risen to $110,000 during the past two years. That is up from $100,000 in 2003. The rise in income does not appear to be the result of additional hours at the office. The same poll showed that private practice lawyers spent around 50 hours per week in the office in 2005-2006. That number is roughly the same as those reported for the last six (6) years.

Other income statistics of note show the following median incomes for the corresponding years: $85,000(2001); $82,000(1999); $75,000(1997).

A good time to go to law school! Might I put in a plug for my Alma Mater, Florida State University.

Child Labor Law: Florida

2006-12-08T08:08:00.000-08:00

I went to high school in Tallahassee, Florida. When I was in High School my parents gave me the option of either playing in the band, playing sports or getting a job. I chose the band my freshman year and sports the other three years. It's crazy how having my skull mashed in playing football and having my arms wrenched out of the sockets on the wrestling team were more appealing than getting a job; but such was the case.

When it finally came time for me to get a job I went to the local recreation department and hired on as a part-time umpire. Not exactly what my parents had in mind. I used to tell them that the Child Labor Law prohibited me from doing anything more taxing (as if 3 hours standing in the hot sun for marching band rehearsal was easy). But what does the Florida Child Labor Law really say?

Minors Under 18 Years Old
Florida's Child Labor Law applies to workers under the age of 18. It prohibits such minors from working in hazardous occupations like construction, electrical work, roofing, mining, excavation, or operating heavy machinery. It also prohibits minors from working around explosives. So much for Mr. Garth's science class.

Minor Work Hour Restrictions
Unless exempted, minors cannot work during school hours. One of the exemptions includes a DCT class my wife (then girlfriend) took that allowed her to earn high school credit while working with a draftsman and getting paid for it. Minors 14 and 15 can only work 15 hours per week when school is in session. Minors 16 and 17 may work up to 30 hours per week when school is in session.

When school is out, minors 14 and 15 may work 40 hours per week, eight hours per day between 7a and 9p. Minors 16 and 17 may work as many hours as they choose when school is not in session.

For more information about Labor Laws contact one of our sponsoring attorneys.

Estate Planning: Intervivos Trust a/k/a Living Trust

2006-11-27T12:29:00.000-08:00

A friend of mine recently gave birth to her first (and likely only given her experience) child at the age of 35. Like most people, she executed a General Will years ago but otherwise did not spend any more significant time thinking about estate planning until her daughter was born. It seems she now spends a great deal of time changing diapers and a little more time worrying about her estate and its impact on her daughter's future. The other day the question arose as to whether she should set up an "Intervivos Trust" a/k/a "Living Trust."

What is a Living Trust?
A Living Trust is probably the most common instrument used by estate planners today for passing property upon death. A Living Trust allows an individual (the "Settlor") to put all of his or her property into a revocable trust and name himself or herself as trustee. When the Settlor dies, the successor trustee conveys the property held in the Living Trust to the beneficiary designated by the Settlor in the Trust instrument.

A Living Trust allows the Settlor to pass his or her assets to a beneficiary quickly and inexpensively upon death of the Settlor and to revoke the Trust at any time during the life of the Settlor. A Trust may be funded by a life insurance policy even though the actual funds do not go into the trust until the Settlor passes away.

One Common Complaint About the Living Trust
One common complaint about the Living Trust is that it should be drafted by an attorney which can result in a lengthy and expensive document. You may be able to find online software to help you draft the document yourself, but doing may expose you to the risk of not crossing a "t" or dotting an "i" and having the trust declared invalid.

States that provide protections to family members such as the probate homestead found in Florida and California are unavailable to dependents of the Settlor. Also, creditors may be able to attach property of the Trust if the Settlor's estate is insufficient to cover the debts.

Trust Property Is Included in Decedent's Estate
Trust property is included in the decedent's taxable estate for estate tax purposes. The beneficiary takes the property at a "stepped up" basis.

Business: What is a Corporation?

2006-11-21T12:38:00.000-08:00

Many of my clients come to me with questions related to what type of business they need to set up. I usually advise them that at least two primary concerns are involved in determining what type of business to go with: liability and taxes. There are obviously other factors to consider but these are usually the primary concerns.

The following are brief definitions of a Corporation. I intend to follow this post with information on other legal entities.

What Is A Corporation?
A corporation is a legal entity created by statute that has all the rights privileges and responsibilities of a natural person. In the eyes of the law a corporation is treated as if it were a natural person. It can open bank accounts, conduct business, and be sued just like you and me.

A corporation possesses attributes of limited liability (i.e. protects its owners from lawsuits), centralized management, continuity of life (i.e no set expiration period) and free transferability of interest (i.e. stocks, etc.).

There are different types of corporations. For small businesses, you may want to look into setting up an S-Corporation.

What Is A For-Profit Corporation?
A For-Profit Corporation is a corporation created for the purpose of conducting business in the broadest sense of the term. Its main purpose is to make money for those who own the business. The one restriction placed on a For-Profit Corporation is that the business it conducts must be legal. In other words, setting up a For-Profit Corporation to run a drug ring will not protect the corporations owners. Sorry Mob Bosses.

What Is A Non-Profit Corporation?
A Non-Profit Corporation is a corporation normally thought of as one created for religious, charitable or educational purposes. A Non-Profit Corporation is not precluded from engaging in a profit making situation. In fact, a Non-Profit Corporation is not necessarily a charitable corporation or one that is tax exempt. They are simply corporations that may not distribute their income to a member, director or officer.

Consumer Protection: I'm All Outta Love

2006-11-10T07:27:00.000-08:00

You may have heard about the Los Angeles, CA court case where the sixty (60) year old woman hired an online matchmaking service to find her a wealthy husband. The woman made an initial payment of $100,000 to the service and the service guaranteed it would introduce her to rich men; presumably eligible marriage candidates. The service took her money and promptly introduced the woman to a man in bankruptcy and another wealthy (but married) man.

The Solution: More Money
Unhappy with the results, the woman paid the service an additional $25,000 for instructions on how to snare a wealthy husband. The service then introduced her to a retired, middle class firefighter and several other middle class men. Still no wealthy prospects.

When All Else Fails, File Suit
In the end, the service failed to provide what it had guaranteed. After numerous unsuccessful matches, the woman sued the service. The jury awarded the woman her initial $100,000 as well as a punitive award of $2 million. Now she can marry whoever she wants (rich or poor) and still be distinguished as a millionaire's wife.

Moral of the Story
The moral of the story is: There is more than one way for an online business to help you achieve your moneymaking goals. Or, never promise a desperate sixty (60) year old woman something that you cannot deliver.

Vote Today

2006-11-07T08:20:00.000-08:00

Just a reminder (if you didn't already know it) today is the day to vote. I voted on the way into work this morning. My voting precinct is located at a small rural airport in the middle of nowhere. I was surprised when I arrived to see how many people showed up to vote for this mid-term election. There were about 10 proposed amendments to the Georgia Constitution and no real interesting races. Despite its location, our precinct has what I would call state of the art voting equipment. I enjoyed voting on the touch screen machine.

I am actually more interested in the issues being voted on just south of the border in Tallahassee, Florida. There is a new County Judge seat up for grabs and one of the guys I knew in high school is running for County Commissioner. They are also deciding on whether a new sales tax should be implemented. I personally oppose the tax because I would have to pay it but would not get the benefits; my being a resident of Georgia.

General Election November 7, 2006

2006-10-31T06:29:00.000-08:00

Just a reminder: if you didn't already know it a General Election will be held on Tuesday, November 7, 2006. They call this election a "mid-term" election because it comes in the middle of a presidential term. Although not as sexy as a presidential election it is no less important on a national level. The political blogs say the election could either transfer control of the Senate and/or House to the Democrats or strengthen control of the Senate and/or House by the Republicans.

I would encourage those who intend to vote to take the next week to brush up on the local and national issues and cast your ballot accordingly. No matter who or what you vote for, your vote should be an informed one.

This has been a public service announcement brought to you by the makers of Medical Uniforms, Winter Long Johns, Basketball Jerseys and Wedding Ideas.

Joint Tenancy with Right of Survivorship

2006-10-18T07:14:00.000-07:00

This post on Joint Tenancy is part of a series of posts I have done on Estate Planning dealing with transferring real property outside of probate. The biggest benefit to avoiding probate is that ownership rights of the property transfer immediately to your beneficiaries without having to go through the estate administration process which can take months and even years.

What is Joint Tenancy with Right of Survivorship?
A Joint Tenancy with Right of Survivorship is a document (usually in the form of a deed) wherein two individuals (often husband and wife) own equal and undivided interests in a piece of property. When one of the individuals dies, the surviving individual acquires ownership of the entire piece of property by right of survivorship. To establish ownership, the surviving individual simply executes and records an affidavit of death.

Pros of the Joint Tenancy with Right of Survivorship
The biggest pro to a Joint Tenancy is the fact that ownership of the property is transferred outside of probate. This makes this type of transfer simple and economical. In addition, the joint tenants are not required to record the deed to create the tenancy which can provide a measure of confidentiality from those who might object to the transfer. Also, when one tenant dies the decedent's creditors lose their rights against the property.

Cons of the Joint Tenancy with Right of Survivorship
A Joint Tenancy Deed is Irrevocable and the transfer is taxable as a gift at the time the deed is executed. Also, during the life of the tenancy, the creditors of both tenants can reach the tenants' share of the property.

Recommendation
Before executing a Joint Tenancy with Right of Survivorship, check out these articles: Estate Planning and the Enhanced Life Estate Deed, The Difference Between the Enhanced Life Estate Deed, Warranty Deed and Quitclaim Deed, The Traditional Life Estate Deed, The Revocable Transfer on Death Deed and California's Revocable Deed.

Can I Evict My Landlord?

2006-10-06T08:26:00.000-07:00

Yesterday's trip to kangaroo court (i.e. county court) was more than a little eventful. While I waited for my case to come up on the docket I witnessed one of the strangest landlord/tenant issues I have ever seen. The facts are these:

Ms. Landlord and Mrs. Tenant were very good friends in college. Ms. Landlord owned a five bedroom home near FSU's campus and agreed to rent a room to Mrs. Tenant. After a year of this arrangement Ms. Landlord decided to sell the home. Mrs. Tenant offered to enter into a lease/purchase contract whereby Mrs. Tenant would lease the home for five years with the option of purchasing it at the end of five years at a price yet to be determined.

Ms. Landlord agreed and leased the home to Mrs. Tenant. During the term of the lease Mrs. Tenant married and had two children who all lived in the home. About three years into the lease, Ms. Landlord's funds ran out and she decided to move back into the home with Mrs. Tenant and her family. Without any notice to Mrs. Tenant, Ms. Landlord just showed up one day, moved Mrs. Tenant's children's furniture out of one of the rooms, replaced the children's furniture with her own and moved back into the house. You should have seen the look on the Judge's face when he heard this.

Mrs. Tenant somehow didn't realize that a landlord cannot just move back into the house whenever she wants. Instead of throwing Ms. Landlord out, Mrs. Tenant decided to cut the amount of rent she was paying in half. When Ms. Landlord got the reduced rent check she sued Mrs. Tenant to have her evicted. Mrs. Tenant countersued Ms. Landlord to have her evicted. The whole scenario was nuts.

In the end, the Judge rendered a Solomonlike verdict evicting both the Tenant and the Landlord. The Landlord was evicted immediately because she should never have been there in the first place. The Tenant is to be out by the end of the month at which time the Landlord can move back in. A perfectly unhappy solution to both parties.

Legal Advice
No legal advice on this one. If you are crazy enough to get caught up in this type of scenario there is really no telling what a Judge will do. I do think he made the right decision though.

A PR Query to Political and Legal Bloggers

2006-10-03T12:54:00.000-07:00

Fellow bloggers, I have a question. I have been told that google has recently performed a page rank update? It appears that the PR on this blog has not changed at all and that none of the posts have updated PR. Is the update over and did I miss all of the fun? Please let me know in the comments section. Thanks. Hope everyone else's PR went up.

Estate Planning: Will or Intestate Succession

2006-09-27T12:21:00.000-07:00

A Shout-Out To My Niece, Jessica

2006-09-14T09:29:00.000-07:00

I apologize to those of you who were hoping for a law related post, but family ALWAYS takes precedence.

Yesterday my sister called me and invited me out to one of the local high schools to watch my niece, Jessica, compete in the countywide sixth grade girls cross-country race. I didn't know they even had a race like that for sixth graders, but I have since discovered that it is a very big deal in Tallahassee. Shows how much of an athlete I was in middle school.

I shuffled around some of my hearings this morning and headed to the high school. When I arrived you would have thought there was a Florida State/Miami game going on. Well, maybe not that big, but there were a lot of people in attendance. Most of the girls were tall and lanky and all decked out in running gear (timing watches, arm bands, etc.).

Jessica, on the other hand, does not fit the tall and lanky mold. No timing watch or arm band either. She is small to middle sized for her age, pony tailed and always smiling. I would imagine that those who saw Jess line up beside the 140 or so other girls would not have given her much of a chance against them. Those who don't know Jessica, anyway.

But those of us who do know Jess knew exactly what to expect. Her heart is bigger than her height and her mind incredibly determined. She has always been that way.

When the girls were lined up to begin the race I noticed that she would not only be racing against the sixth graders, but all middle school grades (sixth through eighth). She began the race in the back half of the pack. By the time she made it around the first lap of the track and headed out of the fence for the cross country portion she had moved to eighth overall.

My sister, brother-in-law and I climbed to the top of the bleachers to get a better look at the runners as they circled the high school campus. We were able to catch brief glimpses of Jessica before she disappeared around the main building. It appeared that at the midway point she had moved into fifth place. As the runners came back into sight one tall eighth grader was well out in front (this girl eventually won). Then another girl, then another girl, then Jessica in fourth place.

As the girls came down the hill and neared the entrance to the track several of the older girls were able to overtake Jess. By the time she entered the gate and ran back onto the track she was in eighth place. Good. But Jess wasn't satisfied.

With about twenty yards left she trailed the seventh place girl by about fifteen feet. I watched her eyes and saw in them the same look of determination I have seen many times before. She began to speed up. With about ten yards left she made up 10 feet on the girl. Jessica was now about five feet behind. Her pace quickened even more and by the time Jess crossed the finish line she had overtaken the girl and beat her by about a yard.

As it turns out, Jessica came in seventh overall and first among the sixth graders. This may just be uncle-ly pride, but it would not surprise me to see Jess competing in an Olympic sport during the next decade or so. GO JESS!!!

Transfer on Death Deed: $19.99

2006-09-11T11:00:00.000-07:00

Have you updated your will lately? If not, you may consider removing real estate from your will (to avoid probate) and executing a Revocable Transfer on Death Deed (TOD). This type of transfer is valid if you live in Missouri, Kansas, Ohio, Arizona, New Mexico, Nevada, Colorado, Arkansas or Wisconsin.

A Revocable Transfer on Death Deed (TOD) is a real estate deed that allows you to designate a beneficiary to whom your real estate will pass when you die. Generally speaking, a valid Revocable Transfer on Death Deed has the following elements and affects:

(1) The deed must state prominently that no interest in the real estate is conveyed until after the transferor's death. The deed does not need to be delivered to the beneficiary, but must be recorded prior to death to be effective as a transfer. The property passes outside of probate. The deed can be revoked at any time prior to death. The beneficiary has no present interest in the property as the property remains within the transferor's absolute possession, custody and control;

(2) The transferor's will does not effect the transfer on death unless the beneficiary dies prior to the transferor;

(3) The property is subject to the transferor's creditor's claims but not the beneficiary's creditor's claims;

(4) The property remains taxable to the decedent's estate; and

(5) The beneficiary simply records a death certificate to effectuate a transfer.

The Transfer on Death Deed is similar to an Enhanced Life Estate Deed (or Lady Bird Deed). In addition to the states mentioned above, California is also considering a statute that would recognize the Transfer on Death Deed.

For more information on whether a Revocable Transfer on Death Deed is right for you, contact one of our sponsoring attorneys below or at the top of this page.