Royal Prenup

/in /by
If you are anything like me, you were glued to your television this morning, to catch a glimpse of the royal bride before you headed off to work.  It has been reported that Will and Kate did not sign a prenup before getting married.  Although I would recommend a prenup for most couples (Crystal and Hef), I don’t necessarily think a prenup for Will and Kate is essential, especially considering the laws in Great Britain.  While prenups are common in the states, they are not nearly as common in Britain.  Although prenups carry some weight, they are not 100% binding in Britain. 
Prenuptuals are all about bargaining power.  Once the royal couple got engaged, the only bargaining power each of them had, was their willingness to walk away from the marriage; something that neither of them were likely to do considering the short length of their engagement and the media coverage surrounding the wedding.  If you aren’t willing to walk away, you don’t have any power because you will do whatever it takes to get to the wedding day.   Perhaps Will realized that he was already asking Kate to give up her life as she knows it and it would be too much to ask her to decide how much that was worth right now. 
The difference between Will and Kate and the rest of us commoners is this:  Will and Kate are both very wealthy at a young age, whereas the rest of us are not so lucky.  Our society tends to view prenuptial agreements as something only the wealthy do.  That should not be the case.  One purpose of a prenuptial agreement is to predetermine how assets would be divided and support would be ordered in the event of a divorce.  However, prenuptial agreements also serve a very important second function: to declare assets that are already acquired as pre-marital assets.  Sometimes attorneys spend more time trying to determine what each of the parties had prior to the marriage (or the value of their assets) than they do trying to figure out what to do with what was acquired during the marriage (this is actually a very simple equation- you divide marital assets equally).  
One of the factors that should be considered when having a prenuptial agreement prepared is age.  The younger you are when the prenuptial agreement is being drafted, the less ability you have to foresee what you might need in the future, especially if other circumstances change.  For example, Will and Kate might have a difficult time negotiating what they may need if they divorce because they do not yet have children and they do not know how much time they are planning for (they do not know how long the marriage may last).
To be enforceable, both parties must fully disclose their financial picture, and the agreement must be entered into without coercion by either party.  Each party should seek separate counsel to advise them on their rights when contemplating a prenuptial agreement, in fact, our office will not participate in drafting or reviewing a prenuptial agreement unless the other party is also represented by counsel.  And remember, you only have as much power as your willingness to walk away.

LLC Formation

/in /by

If you are considering forming an LLC, there are many steps you have to take.  You have to check to see if your business name is available, you have to fill out the Articles of Organization, and then you have to send the completed form, along with the filing fee to the Secretary of State.  I often tell my friends and family that this is something they can do on their own if they wish to save money; however, when I form an LLC for a client, my services include much more than just filling out a form and filing it.

If you retain me to form your next LLC, I will check to see if your business name is available for you.  I will fill out the Articles of Organization form and prepare more complete Articles of Organization to be filed with the Secretary of State form.  My Articles will include the names and addresses of the owners as well as the percentage of ownership of each.  This is advisable because the form that is provided does not have a space regarding the identity and address of the owners.  So basically, if you do not supplement the provided form, anyone can come along and claim that he is the owner of your LLC and no one would know the difference.  Some clients choose to opt out of this offered service and that is fine too.

Clients that are forming an LLC usually need a Federal Tax ID number.  I obtain my client’s federal tax ID number as part of the LLC formation service.  I do this because it allows my client to begin operating his/her LLC sooner than if the client has to obtain it his/her self.

I offer to serve as the statutory agent for my LLC clients.  This means that if the LLC ever gets sued or served with other important legal notices, those documents will come to my firm, rather than the members of the LLC.  This will help protect the LLC in the case that the LLC runs into legal issues.  We notify our clients and provide copies of all documents (as long as you keep a current mailing and email address with our firm).  We can help guide you through the process and provide expertise, if necessary.

Clients that are setting up an LLC with more than one member usually need an Operating Agreement which outlines the terms of their relationship to the company and with each other.  I provide my LLC clients with an operating agreement for an additional flat fee.  An operating agreement is a dense and often complicated contract; however it could save business or personal relationships if the business goes downhill.   We recommend an Operating Agreement to any LLC with more than one member.

Some popular legal form websites encourage people to expedite their LLC application.  I do NOT recommend expediting your application because in my experience, it is a waste of money.  Once you send in your application, the Secretary files it and then sends you the business recording information that you need to open a bank account.  What some people do not know is that once the application is filed, you can access that information via the internet, even if you have not received that information in the mail.  Expediting your application does not get your application filed noticeably quicker than the regular filing.  If you file your application without expediting it, it should only take a few days before you can access your certificate online.

The Tax Holiday

/in /by

With taxes due in exactly one week, procrastinators everywhere are scrambling to finish their taxes so as to avoid the IRS radar.  My initial advice is to not wait until the week before taxes are due before starting them.  However, we are a busy society and if you find that you are a procrastinator, that advice is too little, too late.  As an attorney, many of my family members have asked me if I do taxes.  The truth is that I was never very good at numbers and I dread doing my taxes more than the average person.  Being an attorney and having some knowledge of the tax laws, you would think that I would be willing to endure that torture in order to avoid paying an accountant.  The truth is that the process and anticipation is too painful. This year, I hired an accountant to do my taxes.

It is not that I don’t know how to fill out a 1040, its just that my taxes are no longer simple and even if they were, I don’t enjoy filling out a 1040.  My disdain for doing my own taxes is such that I encourage our government to change the income based tax system to something less citizen-accountant driven.  The only problem with that kind of extensive overhaul is that it would put all accountants out of business, which might be counter-productive.

Although attorneys are capable of doing your taxes, an average attorney is not necessarily going to do a better job than an accountant, and the attorney is probably going to charge more.  If you do have an attorney complete your taxes, my advice is to choose an attorney that practices tax law.  Find an attorney that you know has done yours or someone else’s taxes in the past.  Although you won’t find me preparing individual tax returns for clients, other attorneys market that practice area and are good at it.  Remember: Just because your attorney agrees to do the work, does not mean that your attorney is good at it or has experience doing it.  It is your job to check credentials, if you don’t, you may find yourself in an expensive, intrusive, & exhausting audit.

April Fool’s

/in /by

I was never much of a prankster on April Fool’s Day.  Don’t get me wrong, I enjoy a practical joke as much as the next person.  Its just that April first sneaks up on me so quickly, and good practical jokes come in one of two ways: they are either carefully planned out to perfection, or they just fall into your lap in a way that could not have been planned and unfold perfectly by coincidence.  I was never very good at creating practical joke plots just for the sake of the first of April but for those that can pull it off, I have some advice.

Through marriage last year, I inherited a family full of April Fool’s jokesters and I wanted to provide some practical advice that may prevent a fun joke from turning into major legal trouble.

According to the law, if you intend your actions, you are responsible for the consequences, regardless of whether you intended or could have foreseen those consequences.  If your joke does not go as planned, you may be responsible for damage to personal property or injury to a person.

My advice is to save your practical jokes for your close friends and family members at home and opt not to participate in April Fool’s jokes at work.  If you save your pranks for home, you will avoid the potential for getting fired and from having to continue to work with someone that doesn’t think you are funny.  Things are more likely to go awry when there are many people involved and the more people involved, the more humiliated the subject will feel.  If something does go wrong, your friends and family members will be more forgiving and will be less humiliated.

If you do choose to participate at work, do not set up scenarios where someone could get hurt or property could get damaged.  Most importantly, consider all possible consequences of your actions.  By doing so, you can avoid becoming a fool of April Fool’s.