A previous posting discussed Estate Tax at the federal level. It is important to know that some states impose an estate tax as well. Thankfully Missouri is not one of them.
The Tax Foundation published this map which shows a 50 state survey of which states have a state estate or inheritance tax.
A significant number of my clients have rental properties. Many are casual landlords with just a few rental properties. Others have dozens of rental properties. In both scenarios, the owner of the rental properties can take some common sense steps to limit liability and protect their assets.
First, the landlord should obtain adequate insurance. Our main concern here is with liability insurance. Often my clients select policies that have liability insurance of at least $500,000.
Second, the landlord should form an LLC for the rental properties. In Missouri, LLCs are very cost effective ways to do what its name says, limit liability of the owner. Yet, too many individuals have LLC with sloppy or amateur Operating Agreements. Yet, when it comes to asset protection, having a carefully crafted Operating Agreement is the smart way to maximize the protection of your assets and minimize your personal liability.
In 2013, Missouri passed legislation allowing the creation of a new type of LLC, a Series LLC. Because it is new, there remain several unanswered questions about Series LLCs. Yet, the basic premise is promising for landlords. The Series LLC would allow the landlord to get the benefits of putting all of one’s rental properties in separate LLCs, while eliminating some of the cost of doing so. A Missouri Series LLC consists of an LLC with any number of series. This means a landlord could create one series, “My Rental Properties LLC” and then create 20 series of it, “My Rental Properties LLC, Series A”, “My rental Properties LLC, Series B,” and so on. Each Series is separate and distinct from the other Series. In order to get full asset protection and limited liability, each Series must maintain its own separate books and records. We’ll post more on Series LLCs in Missouri if/when they become more popular.
Third, owners of rental properties need to be strategic in how you title the rental units, as well as the ownership of the LLC. This is one area where we can use the asset protection provided by “Tenants by the Entirety” for married couples to provide additional protection for our clients.
If you own Rental Properties, we are happy to assist you in minimizing your liability, protecting your personal assets, and ensuring a smooth transition to the next generation.
The best part of my job is getting to meet and know my clients and their families. Occasionally, there is some icing on the cake when a client writes you a follow up thank you card or letter. Recently I received two. With their permission, I would like to share part of their comments with you:
Wanda S. writes: “I am so glad you helped me with my Will. I’m very satisfied with you as a lawyer. I want to thank you for helping me.” Short and sweet and very satisfying. Thanks Wanda.
George H. writes: “As we worked with you, we quickly realized this would be a pleasant experience… you were always prompt, very thorough, courteous, respectful and patient….” George’s note included several other kind comments. His note made my day!
I appreciate the kind words of my current clients. For potential estate planning clients, we offer free consultations in our Cape Girardeau office. Call to schedule an appointment where you can discuss wills, trusts, and asset protection with Missouri Estate Planning and Elder Law attorney Mark McMullin.
makerspace: noun (mākərˌspās) sometimes also referred to as hackerspace, hackspace, and fablab, a place where people with shared interests, especially in computing or technology, can gather to work on projects while sharing ideas, equipment, and knowledge.
Good things are happening in downtown Cape. It began with the award winning renovation of Broadway (http://goo.gl/eHTpPR) and has continued as many new businesses have opened up shop. I’m very excited for the next phase of development in downtown Cape, the Marquette Tech District (http://goo.gl/JlUquW and http://goo.gl/9PGZxm).
As part of that development, I have been able to assist a new Makerspace with getting off the ground, including setting up a Missouri Nonprofit Corporation for them. I invite you to get to know Cape Crucible Inc. (https://www.facebook.com/capecrucible/) and see the cool things they are doing.
When possible (and most of the time it is possible), we charge our clients flat fees for estate planning work. That way, our clients will know exactly how much it will cost to have their will, trust, or other estate planning documents prepared.
A Canadian court had this to say about legal services, “A person requiring legal advice does not set out to buy time. Rather the object of the exercise is to buy services.” Our focus is on delivering you the services you want, in the most efficient manner possible.
We prefer flat fees for 4 main reasons:
Flat fees are just another way we deliver value to our estate planning clients throughout Missouri. To learn more, feel free to contract our Cape Girardeau office at 573-334-5125.
Clients often ask what steps can be done to protect their assets. My typical response: “what type of asset protection are you interested in?” Most clients aren’t quite sure how to respond… they are unaware that there are different types of asset protection available. The 3 most common types of asset protection I help clients with are:
Protecting assets is doable… the initial steps are straight forward and simple… the key is asking the question and getting started before you need it. There is no silver bullet for asset protection. Instead, think of it as layers of protection. Get started building your layers of asset protection today.
We are happy to work with your financial advisor. In fact, comprehensive estate planning often requires that we work with your financial advisor, accountant, and insurance professional. One local financial advisor breaks down wealth management into 13 parts. We are actively involved or responsible for 8 of the 13 parts (as shown by the *). The 13 parts are:
Financial planning and estate planning go hand-in-hand. You need both.
While we do not give investment advice, we often encourage clients to contact a trusted financial advisor. For example, many clients have money invested in CDs at their bank (Certificate of Deposits) earning very little. Many financial advisors can find a safe investment that doesn’t earn a lot, but earns 2 to 3 times what the client’s CD at the bank earns.
That’s part of our difference. As estate planning professionals we handle powers of attorney, wills, and trust issues. Then we work with your existing financial advisor, accountant, or insurance professional to help you are get the most from those relationships as well.
A significant number of my clients have rental properties. Many are casual landlords with just a few rental properties. Others have dozens of rental properties. In both scenarios, the owner of the rental properties can take some common sense steps to limit liability and protect their assets.
First, the landlord should obtain adequate insurance. Our main concern here is with liability insurance. Often my clients select policies that have liability insurance of at least $500,000.
Second, the landlord should form an LLC for the rental properties. In Missouri, LLCs are very cost effective ways to do what its name says, limit liability of the owner. Yet, too many individuals have LLC with sloppy or amateur Operating Agreements. Yet, when it comes to asset protection, having a carefully crafted Operating Agreement is the smart way to maximize the protection of your assets and minimize your personal liability.
In 2013, Missouri passed legislation allowing the creation of a new type of LLC, a Series LLC. Because it is new, there remain several unanswered questions about Series LLCs. Yet, the basic premise is promising for landlords. The Series LLC would allow the landlord to get the benefits of putting all of one’s rental properties in separate LLCs, while eliminating some of the cost of doing so. A Missouri Series LLC consists of an LLC with any number of series. This means a landlord could create one series, “My Rental Properties LLC” and then create 20 series of it, “My Rental Properties LLC, Series A”, “My rental Properties LLC, Series B,” and so on. Each Series is separate and distinct from the other Series. In order to get full asset protection and limited liability, each Series must maintain its own separate books and records. We’ll post more on Series LLCs in Missouri if/when they become more popular.
Third, owners of rental properties need to be strategic in how you title the rental units, as well as the ownership of the LLC. This is one area where we can use the asset protection provided by “Tenants by the Entirety” for married couples to provide additional protection for our clients.
If you own Rental Properties, we are happy to assist you in minimizing your liability, protecting your personal assets, and ensuring a smooth transition to the next generation.
Recently we sold my wife’s car via Craigslist. As part of that transaction, I drafted a Bill of Sale which may be of use to others. It is in Microsoft Word format and can be downloaded by clicking here: Missouri Bill of Sale. I used this document to supplement the documents required by Missouri law, and to make clear that the buyer was purchasing the vehicle in “as is” condition.
A few other items to remember when selling a car in Missouri. The seller needs to (1) assign the Certificate of Title, (2) Get a Safety Inspection, and (3) Fill out and submit Form 1957 which is the Missouri Department of Revenue’s Bill of Sale.
A Power of Attorney is a legal document that allows one individual to act on another’s behalf. The person granting the powers is called the principal. The person authorized to act on the principal’s behalf is called the agent or attorney in fact.
The Power of Attorney document spells out the powers that you are giving to your agent. If your agent acts within the authority granted to him or her in the Power of Attorney, those actions are legally binding on you. I’ll repeat that again in slightly different words, as it is critically important to understand. Your agent’s actions, so long as they are authorized by the power of attorney document, are legally binding on you. For this reason, before signing a Power of Attorney you should do 2 things:
What does it mean for a power of attorney to be “durable”?
The agent’s authority under an ordinary power of attorney only exists so long as the principal is of clear mind. If the principal becomes incapacitated, the agent’s authority ends.
Clients often trust family members to continue to act for them even if they are disabled. As such, Missouri law allows individuals to sign a durable power of attorney. Under a durable power of attorney, the agent’s authority continues whether the principal is of clear mind or incapacitated. The durable power of attorney should include the following language:
THIS IS A DURABLE POWER OF ATTORNEY AND THE AUTHORITY OF MY ATTORNEY IN FACT SHALL NOT TERMINATE IF I BECOME DISABLED OR INCAPACITATED OR IN THE EVENT OF LATER UNCERTAINTY AS TO WHETHER I AM DEAD OR ALIVE.
Powers of attorney are powerful estate planning tools. They can be used in the following ways:
Without a power of attorney, if something happens to you, and you need someone to manage your affairs, your family will likely end up in probate court asking the judge for a Guardianship and Conservatorship. This is an unnecessary waste of time, money, and stress.
Take control. Plan ahead. Choose someone you trust. Create a power of attorney.