Asset Protection Planning: What is it and why do you need it?

From shielding your property from lawsuits to using trusts as an estate planning tool, there are many different aspects to asset protection planning. Unexpected events can happen to anyone, so being proactive about protecting what you have worked hard for is vital. An experienced business liability lawyer or estate planning attorney can evaluate your specific situation and provide valuable advice on how to best protect your assets.

Why Asset Protection Planning is Important

There are various financial and legal arrangements that can keep your assets safe from creditors, lawsuits, divorce, and in other circumstances. It is important to have an asset protection plan in place before something like a lawsuit happens. If someone has already started an action or there is a judgment against you, moving assets around to avoid paying it may be considered fraudulent.  The same goes for long-term care planning, which is a type of asset protection planning in which you put certain property and assets in trust to keep them from being taken to pay for nursing home care should you need it. Having an asset protection plan in place well before these types of events happen can safeguard your property and financial interests.

Common Types of Asset Protection Planning

Trusts – Placing assets in a trust legally separates you as the owner of the assets, even if you maintain an ownership interest in them. Trusts are often used in estate planning to shield assets from certain types of taxes, to avoid creditors, and when doing Medicaid planning for nursing home care. There are many different types of trusts that serve different purposes. A skilled wills and trusts attorney can determine which will best meet your needs.

Business entities – The legal formation of a business entity can protect some of your assets as well. For example, setting up a Limited Liability Corporation (LLC) can protect your personal assets in most cases.

Tenancy by entirety – If you are married and own property, placing property in a tenancy by entirety means that only one spouse fully owns the property. If there is a judgment against you, the property cannot be touched if it is in tenancy by entirety of the other spouse. It is important to note that this can complicate things in the event of a divorce.

Insurance – Sometimes, asset protection can be as simple as buying the right type and amount of insurance. However, insurance does not completely shield you from liability. For example, a physician may have malpractice insurance and operate their business as an LLC, which provides extra protection for personal assets.

There are other financial and legal tools that can be used for asset protection planning as well. Asset protection planning is not one-size-fits-all – each person’s situation is different, and there is no one course of action that can be applied to all circumstances.

At Carosella & Associates, our experienced legal team works collaboratively to help you develop an asset protection plan that is tailored to meet your individual needs.

This blog was originally posted at https://carosella.com/asset-protection-planning-what-is-it-and-why-do-you-need-it/

What Is A Partition Action?

When unmarried co-owners of property in Pennsylvania disagree on the sale or control of a property, any owner may request that the property be divided. The partition process can be complex, time-consuming, and costly. If you are dealing with a property dispute in Pennsylvania, having a West Chester real estate lawyer represent your interests and negotiate on your behalf can help you reach an agreement without court intervention.  Avoiding a partition lawsuit is the best way to save money, maximize your portion of the proceeds from a sale, and resolve the matter in a timely manner.

Understanding Partition Actions

A partition action is a lawsuit in which a court determines whether a property with two or more owners is to be partitioned or sold. To begin the process, a partition complaint must be filed in the Court of Common Pleas in the county where the property is located. Although you can file for a partition action on your own, it is risky if you do not have an understanding of Pennsylvania real estate law. Hiring an experienced real estate lawyer can save a lot of time, expense, and headaches in the long run.

What Is Involved In A Partition Action?

After the partition complaint is filed and served, there will be a preliminary conference in which each owner can present their position and attempt to reach an agreement. If an amenable agreement cannot be reached, the judge will continue on or appoint a partition master to oversee the case. The partition master is usually a local attorney who is experienced in real estate law.

How is Property Divided?

The judge or partition master will evaluate whether or not the property can actually be divided into sections. Often, this is not possible with smaller properties or homes, so the court will order it to be sold instead of physically divided. When a case involves a large piece of land, they may order the property to be divided so all parcels are equal in value. If it is not feasible to divide the land so that each owner gets an equal share, the court may order the owner who obtains the more valuable portion to pay the co-owner the difference in value. If this is not a reasonable solution, the court will order the property to be sold.

Common Situations that May Lead to a Partition Action

There are countless scenarios in which conflict can arise, but partition actions often involve unmarried couples, siblings who inherit a home, and co-owners who purchase investment properties together. If you own a property you plan to leave to your children, it is a good idea to speak with an estate planning attorney about the best way to distribute your assets to avoid family conflict after your passing. If you are buying a home with a romantic partner or fiancé, it is best to consult a family law attorney before you purchase it to hash out the details of how ownership will be handled should you split up before you are married.

Do you need assistance with legal matters surrounding real estate? Our experienced team at Carosella & Associates can help.

This blog was originally posted at https://carosella.com/what-is-a-partition-action/

Can You Be Held Personally Liable for Business Debts?

All businesses have their ups and downs. Choosing the right type of business entity can help shield your personal interests and finances should business debt become an issue. Whether you’re a longtime business owner or just starting out, a corporate business attorney can help you understand your rights and advise you on the best course of action to protect yourself.

Business Entity Formation

Choosing an entity that best fits your business and personal needs can help protect your personal assets. That is why it is critical to get the input of a lawyer who has vast knowledge of different business entities and the benefits and drawbacks of each type. Sole proprietors and partners in a partnership are more likely to be held personally liable for business debt, while those who have ownership interests in entities such as corporations and limited liability partnerships enjoy certain protections against personal liability.

Business Succession Planning

A business succession planning lawyer can also assist you with creating an exit plan for your business that ensures your personal interests are protected should your business have to close, you become incapacitated, or decide to retire with outstanding debt.

Business Debt Liability Exceptions

There are exceptions to the protections of these business entities. For example, particular tax debts must be paid by interest holders if a business does not fulfill its duties. Creditors may be able to seek payment from interest holders if fraud occurs. If a business keeps poor records or does not follow required corporate formalities, shareholders may be personally liable for certain types of debt.

Personal Guarantees

Signing a personal guarantee can also expose you to personal liability for business debts. When a lender or lessor knows that a small business does not have many assets, they may ask for a personal guarantee, which gives them the right to pursue an owner’s or shareholder’s personal assets if they default on a loan. Some common types of loans that require a personal guarantee include:

• Loans for purchasing real estate
• Leases for retail or office space
• Financed or leased equipment
• Supplies or materials purchased on specific terms of credit

Dealing with Personal Business Liability

It is not uncommon for someone who is personally liable for a business debt to eliminate it by filing Chapter 7 Bankruptcy. However, you must meet certain income requirements and your consumer debt will also be taken into consideration. In addition, filing bankruptcy affects your personal credit score and can impede your ability to obtain a loan or credit for years. Before filing any type of personal or business bankruptcy, it is vital to have a local bankruptcy attorney evaluate your financial circumstances and help you determine whether it is your best option to avoid personal liability.

If you need help forming a business entity that can protect you from personal liability or dealing with unmanageable debt, our experienced team at Carosella & Associates can help.

This blog was originally posted at https://carosella.com/can-you-be-held-personally-liable-for-business-debts/

Title Issues: How a Real Estate Attorney Can Help

Whether you are a seasoned investor or a first-time buyer, title issues can arise in any real estate transaction. Legal issues surrounding the title of a property can put up roadblocks to closing a transaction, and may even arise after a property has been purchased. Seeking the legal advice of an experienced real estate attorney can help you get them sorted out and ensure your rights and interests are protected.

Common Property Title Issues

There are several common problems that can derail a closing and lead to further legal issues that may require litigation. That is why mortgage lenders usually require title insurance for any real estate transaction. Common title issues include:

Unknown liens – Unpaid property taxes, bills, or loans can lead to a lien being placed on a property. If these liens are not settled before closing, they may become your responsibility.

Errors in public records – Clerical and filing errors, omissions, and mistakes in deed recording such as misspellings, an incorrect or insufficient legal description, or an unrecorded deed can lead to costly legal problems that can stall a transaction.

Missing heirs – When a seller dies, the ownership of a property may pass to their heirs or someone named in a will. If the heir is unknown at the time of death or a family member contests a will, they may step forward and try to claim the property, even after a real estate transaction has been completed.

Boundary disputes – Even if you have a survey of your property, another survey or verbal agreement with different boundaries may exist. This can lead to serious disputes that take you by surprise down the road.

Easements – Discovering easements before purchasing a property is critical, as they can put certain restrictions on how a property is used or give others access to specific parts of the property.

Illegal deeds – When a prior deed is made by a minor, undocumented immigrant, someone of unsound mind, or a person who claimed they were single but were really married, it can affect the validity of current ownership.

Forged documents – Unfortunately, forgeries in deeds and titles are not uncommon. When a forged document is recorded in the public record, it can obscure and jeopardize ownership.

How A Real Estate Attorney Can Help   

A Pennsylvania real estate lawyer can help you identify and resolve these problems at any stage in a transaction, or even after you have purchased a property. They can help you find title insurance, do a thorough search and examination of the title, and negotiate issues like easements, property line disputes, and judgment liens. For commercial property transactions that involve zoning, building, and easement issues, construction contract lawyers or business liability lawyers can ensure any land property you may be purchasing is suitable for its intended use and handle any disputes or negotiations that could hold up your transaction.

At Carosella & Associates, our attorneys handle all types of title and deed issues. We act as your staunch advocate and guide you through any legal pitfalls that may come your way.

This blog was originally posted at https://carosella.com/title-issues-how-a-real-estate-attorney-can-help/

The Ins and Outs of Non-Disclosure Agreements. When Are They Needed?

When you own a business it is vital to ensure that your intellectual property and trade secrets are protected. However, as a business grows and changes, there are certain circumstances in which sensitive information must be shared. A non-disclosure agreement (NDA) can help keep confidential information private and is especially important to maintain a competitive advantage in your industry. An experienced business lawyer can help you create a well-crafted NDA that protects sensitive information and your business interests.

What Is a Non-Disclosure Agreement?

Innovation and new, profitable ideas often require letting people in on valuable information. A non-disclosure agreement is a legally binding contract that keeps this sensitive information under wraps. Sometimes confidentiality clauses are also included within larger legal documents. Penalties for breaking an NDA are outlined in the agreement and can include consequential damages such as lost profits and other remedies. Some important elements that should be included in a non-disclosure agreement include:

• Definition of confidential information
• The terms and duration of the NDA
• Specific parties who may receive the confidential information
• Permitted use of information
• Return of the information
• Which court has jurisdiction over the NDA
• Acceptable remedies for violation of an NDA
• Responsibility for legal fees
• A non-binding clause

A contract or non-compete lawyer can help you understand exactly what these elements mean. They can also draft a non-disclosure that is tailored to meet your specific needs and circumstances.

When Do You Need an NDA?

There are many different situations in which a non-disclosure agreement may be appropriate. These are just a few common scenarios in which an NDA can protect your rights and interests, whether you’re the disclosing or receiving party.

When discussing the licensing or sale of a product, invention or technology. If you are considering selling or licensing a product or technology that belongs to your business, it is crucial to prevent potential buyers from using your information as leverage in negotiations with other companies or individuals. A plethora of information is exchanged during these types of discussions. An NDA can prohibit a potential purchaser from sharing sensitive financial data, proprietary information and even the name of your company with competitors.

When employees or outside vendors have access to proprietary information. Trade secrets and technology aren’t the only things that need to be protected. Employees and vendors you do business with may have access to client lists, supply chain and manufacturing agreements, and other sensitive information that could mess up your business if they decide to leave and take it with them.

When presenting an offer to a potential investor, partner or buyer. New ideas often require fresh perspectives and additional financing. Or maybe you’re ready to sell your business. These types of negotiations and discussions involve revealing a lot of sensitive information about your finances, products, research and development, personal information and maybe even your business succession plan. Making sure the information you share is protected is paramount to safeguard your business and its continued success.

Want to learn more about how an NDA can protect your business interests? Our law firm in West Chester can help.

This blog was originally posted at https://carosella.com/the-ins-and-outs-of-non-disclosure-agreements-when-are-they-needed/

7 Reasons to Consult with an Attorney When Starting a Business

When you’re starting a business, there are many important things to consider, from which type of business entity will best serve your needs to the tax implications of the entity you choose. Depending on the type of startup and your specific circumstances, hiring an experienced attorney to ensure all your legal bases are covered is a solid investment in your business’ future.

How a Lawyer Can Help Your Startup

1. Choosing a business entity. A lawyer can help you understand your options for forming a business entity and the benefits and drawbacks of each type. Whether you choose to form a corporation, limited liability company, limited liability partnership, or another type of entity, business lawyers can provide the vital information you need when considering all of the personal, financial, legal, and tax ramifications of your decision.

2. Raising capital. The procedures for raising capital and making distributions can vary, depending on the type of business entity you choose. If your startup needs to raise money, consulting with a business attorney is critical to ensure you do it in a manner that’s fiscally sound and protects your business’ interests, especially if you’re sharing sensitive or proprietary information with potential investors.

3. Minimizing risk. Risk and liability are part of any business venture. Seeking the counsel of an attorney can help minimize the chances of something going awry and help you prepare for the worst if something does. Your lawyer can help devise risk management strategies that protect your interests, whether it’s making sure you have solid employment policies and procedures in place or advising you on how to protect your reputation and avoid being sued.

4. Protecting intellectual property. Trade secrets and intellectual property are the heart of many businesses. An attorney who is well-versed in intellectual property law can help you secure trademarks, copyrights, and ensure your business is protected from threats from within or outside your organization.

5. Contracts. Leases, NDAs and contracts like shareholder, partner, franchise, and investor agreements need to be done right the first time. Having a contract attorney draft these vital documents can safeguard your business from costly, unnecessary litigation and protect everyone’s interests.

6. Licensing and permits. Obtaining required licenses and permits is critical, especially in industries like construction and real estate. A good real estate lawyer can help you apply for and obtain the permits and licenses you need to ensure you’re operating legally. Federal, state and local zoning, housing, and development law are complex. Having a skilled attorney in your corner can help you avoid common pitfalls that often stall projects before they even get off the ground.

7. Business succession planning. Entrepreneurs who are just starting out often fail to consider how they will exit or pass on their business down the road. Small business succession planning can help you avoid serious problems and facilitate smooth operation when you exit the business. It often goes hand in hand with retirement and estate planning and is especially important if you’re starting a family business you want to pass on to your children. It also addresses issues like tax liability, debt, and matters of ownership.

Do you need help getting your business off the ground? At Carosella & Associates, our seasoned business attorneys have been helping small and large-sized businesses thrive for more than 23 years.

This blog was originally posted at https://carosella.com/7-reasons-to-consult-with-an-attorney-when-starting-a-business/

What are Your Responsibilities as an Executor of an Estate?

Being an executor or administrator of an estate in Pennsylvania involves several important responsibilities. Whether you have been named as an executor of a loved one’s will or you have been appointed as a personal representative by the probate or orphan’s court, seeking the counsel of an estate planning lawyer can help you better understand the process and avoid common pitfalls that may arise. Knowing more about the steps to take to settle an estate can help you make informed decisions in the best interests of everyone involved.

Register the Will

In Pennsylvania, an executor must submit a will and a certified copy of the death certificate to the Register of Wills in the county where the deceased person (testator) lived. If the will is deemed valid, the Register of Wills issues letters testamentary to the executor, which gives the executor the right to act on the estate’s behalf. Copies of the letters testamentary should be given to the testator’s bank, business accounts and taxing authorities to prove that the executor is authorized to conduct business on behalf of the estate.

If the deceased person did not have a will, a personal representative (administrator) is appointed by the Probate Office or the Register of Wills that has jurisdiction over the deceased person’s estate. The executor or administrator is then authorized to assume control of the estate’s assets, use them to pay any debts and inheritance tax, and distribute any balance to beneficiaries. An experienced probate attorney can explain the probate process to you and help you understands your rights and responsibilities as an executor of an estate.

Inventory and Accounting of All Assets and Debts of the Estate

The executor or administrator of the estate should gather all documentation surrounding the deceased person’s debts and assets. Once an inventory of assets and debts is prepared, the executor can estimate how much of the assets will be necessary to pay all reasonable debts and taxes. The inventory must be filed with the Register of Wills within six months of the date of death. Important documents may include:

• Will
• Bank statements
• Brokerage statements
• Birth certificate
• Insurance policies
• Deeds to real estate
• Divorce decrees
• Property tax records
• Tax returns
• Social security records
• Vehicle titles
• Trust documents

Certain assets may not be required to go through probate, including property in a living trust, some jointly-owned real estate, life insurance policies and retirement accounts with designated beneficiaries, and bank accounts with payable on death or transfer on death clauses. If you need assistance with figuring out which assets can avoid probate, consulting a trust attorney can be helpful.

Notifying Creditors, Beneficiaries, and Others

Creditors, beneficiaries, and others with an interest in the estate must be notified, and certification of the notices must be filed with the court.  An executor should also notify certain government agencies of the decedent’s passing, such as the Social Security Administration, PennDot, and the U.S. State Department if the decedent held a passport. Cancel and destroy any credit cards and notify the banks that issued them. It is also important to forward the decedent’s mail to you so that you receive any bills that need to be paid. If the decedent belonged to any organization or donated to any charities, it is a good idea to notify them so they can update their records as well.

Paying Debts, Filing Tax Returns and Distributing Estate Property

Estate assets are typically used to pay final medical bills, funeral expenses, estate administration fees, and reasonable debts.  A State inheritance tax return has to be filed and a federal estate tax return may also be filed. A final accounting of the remaining assets and a schedule for the distribution of remaining property should be made and filed with the Register of Wills. If there’s any disagreement, an audit of the estate will typically be ordered.

Do you have questions about being an executor or need assistance with estate planning? Our team at Carosella & Associates can help.

This blog was originally posted at https://carosella.com/what-are-your-responsibilities-as-an-executor-of-an-estate/