DCP Law Office, LLCExperienced Legal Representation For Estate Planning And Administration, Business Law, And Real Estate Matters2023-10-16T20:40:57Zhttps://www.dcplawoffice.com/feed/atom/WordPress/wp-content/uploads/sites/1603389/2022/03/cropped-site-identity-32x32.jpgOn Behalf of DCP Law Office, LLChttps://www.dcplawoffice.com/?p=467062023-10-16T20:40:57Z2023-10-16T20:40:57ZDoes your spouse have a claim on your business?
One of the first questions you should address when approaching the divorce process is whether your business is marital property or nonmarital property. If your business is marital property, you will divide it with your other possessions during divorce.
However, if your business is nonmarital property – for example, if you designated it as separate property in a prenuptial or postnuptial agreement – you are its sole owner. While its value might factor in the division of other property, your company will likely stay in your possession. However, please be advised that it does not mean that your business will not be impacted by the divorce.
What will happen if your business is marital property?
If the court determines that your business is marital property, you can still take steps to protect it from the impact of your divorce. Pennsylvania courts divide property based upon equitable distribution principles.,
Here are three potential options when dividing your business, however the parties can always reach a different, hybrid approach:
Selling the business – Selling a business and dividing the money you receive can provide you and your spouse with funds as you embark on the next chapter of your life. However, this approach also means giving up your business and going through the stressful task of finding a buyer.
Buying out your spouse’s share of the company – If you want to move forward as the sole owner of your company, you may give up a portion of your savings or other assets in exchange for your spouse’s stake in the company.
Moving forward as joint owners – If you and your spouse can put the business first, you may be able to run the company together after divorce. However, this can be financially and emotionally complex, and you should clearly outline each spouse’s responsibilities.
Business owners concerned about the challenges they may face during divorce should seek experienced guidance either before the marriage occurs, before formation of the business, or immediately if a divorce is imminent. An attorney with experience in both business law and family law can provide unique insights and create a strategy that supports your future goals.]]>On Behalf of DCP Law Office, LLChttps://www.dcplawoffice.com/?p=467052023-10-12T14:09:57Z2023-10-12T14:09:57ZAre you required to have an operating agreement for your LLC?
Pennsylvania law does not require limited liability companies to have an operating agreement. However, an operating agreement can be important to support and protect your business.
Not only can these agreements add structure to your business, but they can also ensure that all members of your organization understand that structure and their duties. This can prevent many conflicts that arise from misunderstandings and miscommunication.
Operating agreements can also provide financial benefits. An operating agreement draws a clear line between the company and its members, which can clarify their protection from personal liability for company debts. It can also detail how the company will be taxed. Failure to have an operating agreement may be utilized to help “pierce the corporate veil” which is required to obtain personal liability of LLC members.
Additionally, an LLC is a separate legal entity, so death can present difficulties if an operating agreement is not available to provide legal authorization for wrapping up or continuing the business.
What details can an operating agreement include?
Operating agreements can clarify many details about your company, your current structure, and the procedures to be utilized when future challenges arise. Your operating agreement will answer a variety of questions, including:
What name will your company use?
What product or service will your company provide to customers or clients?
How often will the members of your company meet?
Who are the members of your LLC, and what responsibilities do they have to the company?
How will you resolve disputes between members?
How can members exit the LLC?
How will new members join the LLC?
What procedure will you use to close the company?
What happens when a member dies, or the last member of the LLC?
Because of the many details an LLC operating agreement can address, you may want experienced guidance as you create this document. With help, you can create a legally sound document and identify areas where more information could support and protect the company you are building.]]>On Behalf of DCP Law Office, LLChttps://www.dcplawoffice.com/?p=467032023-08-28T14:12:10Z2023-08-28T14:12:10ZYour executor should be someone you trust.
Acting as executor for an estate is an important task. You want to choose someone who you trust to act responsibly at every stage of the process and who can communicate effectively with your loved ones.
Your executor should have the skill necessary to manage your estate.
CNBC reports that it takes on average around 16 months to close an estate after someone passes away, and larger estates may take years. During that time, your executor must manage the assets in the estate, pay debts and file taxes. Choosing someone with the financial acumen to effectively manage those possessions before they pass to your heirs is crucial.
Your executor should be able to handle the emotional strain of the probate process.
The probate process is stressful, and communicating with your loved ones can be a challenging experience. Someone who can be compassionate to your loved ones during probate and manage conflict that arises will be better able to make sound decisions during this difficult time.
Your executor should keep the best interests of your loved ones in mind.
Ultimately, you create your estate plan to support your loved ones and ensure they receive their inheritance. Choosing someone who will center your loved ones’ needs when making decisions will help ensure that your heirs are treated equitably per the terms of your estate plan.
Choosing an executor can be challenging, but careful thought and experienced legal guidance can help you select a trustworthy executor and protect your estate.]]>On Behalf of DCP Law Office, LLChttps://www.dcplawoffice.com/?p=467022023-07-19T14:57:25Z2023-07-19T14:57:25ZSuccession planning offers security if the unexpected should happen.
If you decide to sell your business or want to retire, you will have time to guide your business through this transition. However, having a succession plan can protect your company if illness, death or other challenges suddenly leave the company without leadership. A clear plan can provide guidance in these difficult situations and limit the impact on your company.
Early succession planning gives you time to identify future leaders.
Whether you want to keep your company in the family or choose leadership from within the ranks of your employees, proactive planning can help ensure that your successor is ready to take on that role. You can outline the core competencies necessary to lead the company, identify interim leaders and ensure that your business is in good hands no matter what the future brings.
Careful planning can align your succession plan with your estate plan.
Especially when you want your business to pass to the next generation, you should balance your business succession plan with your estate plan. Creating your succession plan in conjunction with your estate plan can help you provide an equitable inheritance to your loved ones, whether or not they will succeed you in your business. This can reduce the risk of future conflict.
Succession planning can be essential for business leaders to protect their businesses and support the long-term success of the business.]]>On Behalf of DCP Law Office, LLChttps://www.dcplawoffice.com/?p=466992023-06-01T14:30:55Z2023-06-01T14:30:55ZEstate planning ensures that you decide what happens to your company.
As an owner of a business, you have set and achieved many goals for your business. However, passing away without an estate plan leaves the next chapter of your company’s operations in the hands of the law. Estate planning allows you to determine who will inherit your company, allowing you to choose someone who will continue this work and guide your business’s operations into the future. Estate planning is a subset of the full succession planning for your business that you should consider completing at your earliest opportunity.
Estate planning can support both your loved ones and your business.
While most people think of an estate plan as a means to provide for their loved ones, your plan can also be a way to protect the business you have built. Unfortunately, dying without an estate plan or succession plan could lead to the dissolution of your business, or having your business assets caught in limbo. For example, a sole proprietorship may cease to exist without its founder if the beneficiaries do not agree on whether to continue the company’s operations or a limited liability company could be left without access to funds or even control of the company being established. With appropriate estate, asset and succession planning, however, you can take steps to ensure that your company continues into the next generation of owners and potentially protect valued employees.
Some estate planning tools can keep your business out of probate.
Death and the probate process has the potential to disrupt your business’s operations. This can not only impact your company’s continued operation, but it can also interrupt the income your family relies on. Utilizing estate planning tools such as trusts, wills, operating agreements or bylaws, and succession planning could allow you to bypass the probate process, either passing the company immediately to its new owner without interruptions or wrapping up operations. Note these are only some of the tools available for successful continuity and succession planning for your business.
Creating an appropriate and effective estate and succession plan to achieve your goals can be challenging. Thankfully, with the proper guidance, you can make informed decisions that support your goals for your business, reflect your wishes for your estate and support your loved ones.]]>On Behalf of DCP Law Office, LLChttps://www.dcplawoffice.com/?p=466972023-04-27T17:32:30Z2023-04-27T10:00:32ZA sole proprietorship is often simple to start.
Starting a business can be complex, but choosing a sole proprietorship structure can streamline that process. While you will still have to obtain the necessary licenses and permits required by the federal, state and local government, you may not have to register a sole proprietorship with the state. You also do not need to apply for an employer identification number, unless you have employees. This means you can limit the paperwork you file before beginning operations.
A sole proprietorship can simplify your business finances and operations.
Because sole proprietorships are directly linked to the owner, the owner has complete control over the business and its finances. This means that you could utilize your own bank account for the company and take owner’s draws directly from the profits, though it may still be preferable to have a separate bank account for the business.
A sole proprietorship structure can also simplify the filing process during tax season. Rather than filing as a business and as an individual, owners of sole proprietorships report their profits or losses on their personal tax returns, though tax implications should always be discussed with a tax professional.
While structuring your business as a sole proprietorship has a number of benefits, it also has significant limitations and liability concerns. It is essential to consider all your options when forming a business and to discuss your options with a legal and tax professional. Additionally, some business types do not permit sole proprietorship as a structure, so the right guidance is necessary when selecting your business structure.]]>On Behalf of DCP Law Office, LLChttps://www.dcplawoffice.com/?p=466952023-04-12T16:47:18Z2023-04-12T16:46:19ZYour family dynamic has changed
Getting married, welcoming a new child into your family, or having a child reach adulthood are all joyous occasions. However, these changes to your close family relationships can be an important reminder to update your plan. You should adjust your plan to support your growing and changing family. Painful circumstances like divorce or losing a loved one should also be cause to review your plan.
Your financial situation has changed
If you have received a significant inheritance, changed careers, had a significant windfall or experienced financial hardships, your estate likely looks very different than it did when you created your estate plan. Crafting a new plan, reconsidering how you want your property to be divided and addressing other details such as tax implications can be important ways to protect those assets and provide for your family.
Changes to real estate holdings
Real estate is often a person's most valuable property. If you have bought a house, sold land or engaged in another real estate transaction, you may want to utilize different estate planning tools to protect your investments.
You have moved to a new state
Creating a new plan to ensure that you have a valid will and other documents in place is an essential step for people that have relocated. Every state has its own requirements for a valid estate plan. As a result, your old plan may no longer fit the legal standards in your new home state.
More than three years since estate planning completed
Sometimes, the small steps you take in life can add up over time. Your income may change slowly. Your relationships may shift. Your goals may change. Because these changes are often subtle, reviewing your estate plan periodically is vital to ensure that it still fits your life and wishes.
Periodically reviewing your estate plan and seeking guidance about updates can help you ensure that your estate plan reflects your wishes at every stage of your life. While three years is not a set in stone time frame, it can be used as a frame of reference for review.]]>On Behalf of DCP Law Office, LLChttps://www.dcplawoffice.com/?p=466942023-03-27T18:47:53Z2023-03-27T18:47:53ZA prenuptial agreement can protect your financial health in many ways.
One way that a prenuptial agreement protects your financial health is by protecting your income. When your income exceeds your spouse’s, you might find yourself paying spousal support if your marriage ends. However, a prenuptial agreement allows you and your spouse to determine whether you want spousal support to be part of your life and identify a fair amount.
A prenuptial agreement can also protect essential assets that you owned before your wedding day. While issues like commingling may endanger your home, business or inheritance, a prenuptial agreement can limit that impact and protect your valuable possessions. An agreement can also protect sentimental items like family heirlooms.
A prenuptial agreement can also reduce the amount of marital assets spent on litigation over the assets leaving more assets available for the parties.
A prenuptial agreement can build greater confidence in your relationship.
Every marriage faces challenges, and many of those challenges involve money. The process of creating a prenuptial agreement can help you and your spouse learn more about what each of you values and how to talk about money in the future. It also allows you to make arrangements for supporting each other should a divorce ensue at a time when you care and love each other the most, rather than trying to resolve the issues at a time when you distrust and maybe even dislike each other.
A prenuptial agreement may also help you face future decisions with greater confidence. When you know that your financial health has the protection it needs, you can make investments in your household without worrying whether you will damage your individual financial health.
While creating a prenuptial agreement can be daunting for many couples, it may also provide them with the protection they need in future challenges.]]>On Behalf of DCP Law Office, LLChttps://www.dcplawoffice.com/?p=466912023-02-24T15:11:13Z2023-02-24T15:11:13ZChoosing an LLC structure limits your personal liability
Business structures like sole proprietorships and partnerships do not divide the company from its owner or owners. As a result, owners are personally responsible for losses and debts accrued by the business.
Limited liability companies, on the other hand, do precisely what their name suggests: limit owners’ liability by creating a clear divide between the company and its owner. This helps you manage your personal risk, protecting your finances and possessions if your business struggles to pay a loan or faces a lawsuit.
Requirements to form an LLC in Pennsylvania
If you decide an LLC is the optimal structure for setting up your business, there are several requirements for formation in Pennsylvania:
Select a unique name for your business that includes "company", "limited", "limited liability company" or an abbreviation (LLC or LTD) within the title.
Designate an official mailing address or registered office in Pennsylvania.
File all necessary paperwork including a Certificate of Organization and docketing statement.
If your business employs multiple individuals, there is also the additional requirement of obtaining an Employer Identification Number (EIN) from the IRS. While not specifically required, you may also benefit from developing an operating agreement that outlines the groundwork for your business and what happens in the event of your death or business dissolution, something your personal will or estate planning cannot handle.
While choosing to structure your business as an LLC can offer several benefits, entrepreneurs should consider all their options when forming a company. Choosing the right structure can be a crucial step toward your future success.]]>On Behalf of DCP Law Office, LLChttps://www.dcplawoffice.com/?p=466902023-01-18T15:29:09Z2023-01-18T15:29:09ZWhen people start the estate planning process, online resources and self-help guides often seem like a straightforward way to complete this task. However, creating your own estate planning documents can come with many risks, and errors made during the planning process can have serious consequences.
Thankfully, do-it-yourself estate plans are not the only option available to you. Working with an experienced attorney can help you avoid common missteps and create a comprehensive plan. How might you benefit from seeking legal guidance while creating your estate plan?
An attorney knows the requirements for a valid will and other estate planning documents.
The requirements for valid estate planning documents depend on the documents you use and where you live. Templates may not conform to your state's requirements, and online resources may not offer the details you need. Without valid estate planning documents, the court will decide what happens with your property.An attorney with experience in estate planning can offer insights into the statutes in your state and thoroughly review your documents to ensure that they meet these requirements. As a result, you can have greater confidence that your documents are sound.
An attorney knows the estate planning options available to you.
When you create your own estate plan, you are often limited by your own knowledge. You may not know all the documents you can use in your estate plan or how to use those documents effectively. For example, you may be most familiar with wills used in estate plans, but you might overlook other documents that better fit your unique situation.When you speak to an attorney about your estate plan, however, you can focus on the goals you want to achieve and your specific life circumstances. Your attorney can help you select the documents that can help you achieve those goals. They can also help you identify potential issues and prepare accordingly.The law does not require you to work with an attorney to create your estate plan. However, working with an experienced attorney can help you face the estate planning process and the future with greater confidence.]]>