Why Transferring Property Via Deed may not be a Good Idea
Deciding what to do with your property and assets after death can be quite difficult. Who do you
want to own your property? How does property get transferred? What is probate? Should I just
transfer ownership during my lifetime instead of waiting until after death? These are frequently
asked questions for individuals who are making their estate plans. For some, they think that
transferring ownership of the property during their lifetime is the way to go. They think that by
adding their children, grandchildren, or other intended beneficiary to the deed, they can avoid
any issues that might arise after their death. While on the surface this might seem like the best
option, transferring property to another individual before your death might result in unintended
and undesirable consequences.
The issues surrounding transferring property via deed to another person stem from the ownership
rights the other person would then have to your property. For example, an individual who owns a
home and wishes to leave it to a child after death might consider putting that child on the deed
now. The child who is included on the property’s deed is now a co-owner of the property. This
might not seem like an issue, but sharing ownership with someone is a risk in and of itself.
The following are issues that might arise when sharing ownership:
- Civil suits: If the co-owner of your property is sued, your property could be at risk. You
do not want to lose your home because someone else is being sued.
- Even if you are the co-owner of the property with your child, you do not know what someone
else is capable of. The co-owner might try to evict you or otherwise take away your
ability to live in your own home, even if you are currently living there. A California
couple in 2016 found themselves in this situation.
- Untimely death: If the co-owner passes away before the other individual, there is the
possibility of the other owner being subjected to paying taxes including capital gains
taxes due to not receiving a step-up in basis.
- Lines of Credit: The co-owner of the property can take out a mortgage or other equity
without your consent. Beyond just knowing what lines of credit are tied to your property,
if the co-owner falls behind in payments, then your property is in danger.
In order to avoid any issues with the co-ownership of property, you can pass along that property
through a trust or a will. An experienced estate attorney can help you determine the best way to
handle your property after death. The estate attorneys at the Law Offices of Kris Mukherji are
here to help you create an estate plan that works. We know that it can be confusing to determine
what to do with your assets and property after death. We want to eliminate this confusion and set
you up with an estate plan that addresses issues and gives you the peace of mind that your
property is taken care of following your death. Contact us today for a consultation.
You may have noticed that there are quite a few businesses in California that have the initials “LLC” at the end of their names. The Limited Liability Companies (LLCS) were likely established with the skilled guidance of a California business attorney. Limited liability companies represent just one of the business entity designations available to California businesses. The seasoned professionals at the Law Office of Kris Mukherji can help California business owners decide whether an LLC designation is the right choice for their business.
What is an LLC?
A limited liability company (LLC) is one of many business entity types available to businesses in California. Some LLCs have only one owner, while others have more than one. Like a partnership or a sole proprietorship, an LLC utilizes pass-through taxation. Pass-through taxation means that the profits and losses of the business are passed through to the owner, who then pays taxes on them. Owners do not have to pay taxes on the LLC’s income twice, once for themselves and once for the business. For this reason and others, the LLC is a popular designation for California businesses.
An LLC also has some features in common with a corporation. A corporation and an LLC both
have limited liability, which means that its owners are not personally financially responsible for the financial obligations of the company. If a judge orders a corporation or LLC to pay a certain amount as a legal settlement, the money can only come from the business itself. The law cannot require the owners to pay the settlement out of their personal assets.
Pros of the LLC Business Designation
- Flexibility of business structure: You can own the LLC by yourself or with partners.
- No double taxation
- Limited liability: If your LLC goes out of business, you will not be personally responsible for paying its outstanding debts. The same protection applies if someone sues
Cons of the LLC Business Designation
For many business owners, an LLC designation sounds like the best of both worlds — they can enjoy the pass-through taxation of a sole proprietorship and the liability protection of a
corporation. The biggest disadvantage to forming an LLC in California is that process of forming one can be complicated, and the requirements are strict. You will need an experienced California business lawyer to help you comply with all the requirements so that your LLC can operate legally and enjoy the highest levels of success.
Contact Kris Mukherji for Help Legally Establishing Your Business
The LLC designation is a popular business entity type, but it is not for everyone. Contact the Law Office of Kris Mukherji today for help choosing the best entity designation for your business.Read More
A recent poll suggests that an astonishing 56% of Americans do not have a will. While this figure is unsettling, it is important to recognize that individuals who have a last will and testament are not necessarily in the clear, either. Depending on the age of your will and who put the document together, there may be some issues that can potentially leave your loved ones in a bad situation after your passing. One of the best ways to ensure that your affairs are in order is to have an experienced California estate planning attorney help you establish a trust as part of your estate planning. Your assets will be held in the trust and they will be secured until your beneficiaries are eligible to receive their allotment of your assets.
A trust is a good way to add an extra level of protection to your assets. With a trust in place, your assets will not belong to the grantor of your will once the assets have been transferred over to the trust. With the help of a trust you can choose exactly who receives what assets and when those funds are distributed. This is a good way to ensure that the recipients of your assets are protected against frivolous spending or receiving funds before they are mature enough to be responsible for them.
Additional Benefits of Trusts
Trusts provide an element of control that little else can. They also provide certain levels of
privacy that would otherwise not be afforded to your estate after your death. A trust enables your heirs to enjoy certain tax breaks and the peace of mind of knowing that they will not need to go through probate upon your death. Depending on your specific set of circumstances, your California estate planning attorney can help you decide what trust is the best fit for you.
Common Forms of Trusts
- Revocable Trust: You retain control of your assets during your lifetime, and your estate can be distributed outside of probate. This type of trust can be dissolved at any time regardless of reasoning. Once you die, this trust will become irrevocable.
- Irrevocable Trust: The purpose of an irrevocable trust is that it cannot be altered once it has been executed. This potentially puts your assets outside the reach of probate and estate taxes. Once the trust is established, you no longer have control of your assets.
- Charitable Trust: This allows a certain portion of your assets to go to the charities of
- Marital Trust: This is designed to pass your assets to your spouse when you pass away
Do You Need Help?
There is a great value and peace of mind associated with establishing a trust. A properly drafted trust will allow you to avoid the probate process and have your wishes carried out seamlessly. Prior to establishing a trust, you should determine your goals and exactly what you would like your trust to achieve. When you are ready to establish your trust, contact the experienced and skilled attorneys at the Law Office of Kris Mukherji. We will guide through the estate planning process so that you can enjoy the peace of mind of knowing your loved ones will be provided for upon your passing.
Think about the last time you looked at or signed a legal document. Was it full of words you did not understand? Did some of the words seem like they might even be made up? There are no shortage of these types of terms in the legal field. The estate planning process is no different. Your estate planning attorney should be able to explain any foreign concepts to you and make sure you understand what is going on. Two phrases that often come up in estate planning are “per stirpes” and “per capita.” These two small phrases can have a major impact on how assets are distributed after death. These each represent a different type of distribution style. It is important to understand what each means so that you can choose the right method for your estate.
In Latin, per stirpes means “by the roots.” In estate planning, this type of distribution is all about your family tree and following a distribution pattern according to each “branch” of the tree. Each member of a particular branch of the family tree will receive a proportionate share of the estate. To understand this more, here is an example. A widowed husband without a will has three children. One child is deceased but with two children of his own. The decedent’s estate will be split evenly between his three children. Since one of the children is deceased, that child’s heirs will split his portion evenly. The “roots” in this situation are the three children, with the shares of the estate being split among them.
Per capita is also a Latin word meaning “by the head.” Instead of splitting the shares of an estate among a branch of the family tree, in per capita every living member will receive an equal portion of the estate. Using the same example as above, the two remaining children of the decedent split the estate evenly. The decedent’s grandchildren receive no shares of the estate.
The biggest difference between per capita and per stirpes distribution is that if a member of a group on the family tree is no longer living, their share is not passed on to any of their own heirs. The remaining members of a group receive the entire amount, there is no passing onto the next generation in place of a deceased member.
In California, choosing the way you want your assets to be passed to your heirs can be complicated. Per capita and per stirpes are both viable options that you need to discuss with your estate planning attorney. The estate planning attorney at the Law Offices of Kris Mukherji is here to help you with all of your estate planning needs. We make sure to discuss all of the available options with you so that you can make an informed decision about how you want your assets distributed after death. Estate planning needs to be done early and updated often. Contact us today to get started.Read More
Whether you are drafting or signing a contract for your business, it is important to look it over carefully so you know what exactly you are asking someone to agree to, or what exactly you are agreeing to in the case of signing. Reading the fine lines of a contract might not be the most exciting step in running a business to you, but it is important. The following are elements that you should be on the lookout for whether you are drafting or signing a business contract.
Negotiation: First and foremost, it is important to mention that negotiation is a key part in most contract formation. Each side needs to have the ability to express the terms and conditions they want present in the contract. From there, negotiation can take place to ultimately decide what those terms and conditions are.
Basic Elements: In California, there are basic elements that must be present in order for a contract to be enforceable. These are, at the bare minimum, what must be present in a contract.
Parties: Everyone that is going to be held to the terms of the contract need to be listed and identified appropriately.
Rights and Responsibilities: The point of most contracts is to outline the responsibilities of each party involved. Make sure the terms of the contract are spelled out clearly. Do not rely on a purely oral understanding of the contract. This is where it is important to read the entire contract because the responsibilities and rights of each party are often spread throughout the contract in various parts, not contained to just one paragraph.
Remedies: Every contract should include a provision for what should happen if things go awry. While you do not want there to be a breach of contract, knowing that there is a plan should something happen is imperative.
Confidentiality: Is this contract confidential? Or, are the terms and conditions going to be available to everyone? Make sure to include the requisite language of confidentiality, depending on your specific needs.
Disputes: Should there be a dispute during the term of the contract, it is important to spell out how that dispute should be handled. Arbitration, court, and mediation are common types of dispute resolution named in contracts.
Termination: Does either party have the right to terminate the contract? What are the conditions in which termination is appropriate? Be sure to include provisions about terminating the contract and the process to do so.
Incorporated Documents: If there are other documents relevant to this contract, make sure they are clearly referenced in the contract.
Signatures: In order for a contract to be enforceable, it must be signed by all parties involved. Be sure to check for the proper signatories who have the authorization to sign the contract.
The business attorneys at the Law Offices of Kris Mukherji are here for all of your contract needs. Whether you are drafting or signing a contract, we can help you understand and interpret the contract, as well as help you decide what terms and conditions you need to be present in the contract. Contact us today for a consultation.Read More