Minnesota Estate Planning | Forming an LLC in Minnesota

by Flanders Law Firm LLC on February 6, 2018

Forming an LLC in MinnesotaIf you own an existing small business or are considering launching an entirely new business, you may be debating the legal form that business should take. A commonly used option is to create an LLC. Though you may have heard the term, you may not fully understand what an LLC is or how to go about creating one in Minnesota. If so, keep reading for more information.

What’s an LLC?

First things first, what does “LLC” stand for? LLC refers to a limited liability company. This means that with an LLC, the owners of the company receive a form of protection known as limitation of liability. This means that the owners are usually not personally liable in the event that the LLC owes money to others, either due to debts or legal claims. In that way, an LLC is like a corporation. From a tax perspective, LLCs are like sole proprietorships or partnerships in that the LLC does not pay any income tax itself. The profits are instead passed through the LLC and the owners pay taxes on their share. These are reasons why experts view LLCs as a kind of hybrid, a business form that combines elements of several other business types, including partnerships, sole proprietorships and corporations.

How is an LLC structured?

An LLC can be structured in a number of different ways, that is one reason why it is such a popular corporate form. LLCs can be owned by one person or many. Those who have ownership stakes in an LLC are known as members. Those with only one member are, surprise surprise, known as single-member LLCs. Those with many members are referred to as multi-member LLCs. LLCs can be managed by the members or a professional manager can be appointed to handle daily operations of the LLC.

When is an LLC a good idea?

Though LLCs are very flexible corporate forms, they may not make sense in every case. LLCs are especially valuable in circumstances where a business faces risks of lawsuits or if substantial business debt is likely to be required. If you can foresee a world in which you are on the hook for large amounts of money, putting your personal assets at risk, an LLC is worth considering. If, on the other hand, your company presents a low risk of attracting lawsuits and will not end up accumulating much debt, an LLC may not be necessary.

How do you form an LLC in Minnesota?

If you’ve settled on an LLC, what do you do next? First, you need to pick out a name. Under Minnesota law, an LLC name must include either “LLC” or the words “limited liability company”. Once you’ve found a name, you’ll need to register it with the Minnesota Secretary of State. With that step out of the way, you’ll then need to draft and file articles of organization with the Secretary of State. These articles include things like the name of the company, its purpose, and a name and address for service of legal notices. If you haven’t already done so, you’ll need to establish a registered agent. You will also need to register the LLC with local tax and other relevant regulatory bodies. Finally, you will need to draft an operating agreement. Though not strictly required by Minnesota law, this is an important step that should not be overlooked. The operating agreement is the manual for your LLC and explains who owns what and how the company will run going forward. Skipping this step now can result in major headaches down the road.

Minnesota Estate Planning and Business Lawyers

Its good to know that with the right help, establishing a Minnesota small business does not have to be a scary proposition. An experienced Minnesota small business attorney can help walk you through the process of setting up your new company and ensure it offers the maximum benefits for your individual situation. For more information, contact Joseph M. Flanders of Flanders Law Firm at (612) 424-0398.

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What Is a Revocable Trust | Minnesota Law

by Flanders Law Firm LLC on January 5, 2018

What is a revocable trustWhat is a revocable trust?

When most people think about estate planning, their first thought likely involves creation of a will. Others may realize the importance of a living will/healthcare power of attorney or even a financial power of attorney.

Once the bare minimums have been accounted for, its rare for most people to think any further. Thats unfortunate, because there are a wide array of estate planning tools that exist and could be used to the benefit of a large number of people. Many people are simply unaware of their existence and end up missing out on potentially important tools that can be used to save time and money.

A revocable trust is one such example. Revocable trusts are referred to in a number of different ways, which can make discussions surrounding their use confusing. Revocable trusts are also known as revocable living trusts, living trusts, inter vivos trusts, and loving trusts. Each refers to the same basic estate planning tool. For the sake of argument, well go with revocable trust.

So what is a revocable trust?

A revocable trust is a trust that is created during a persons life (hence the name living trust). The trust is then used to help manage your assets, allowing you access to the items, while offering some protection. These kinds of trusts are helpful if you become sick or disabled as they allow for someone else to manage your assets while you are still alive. They can also allow for the distribution of assets once you have passed away. Though revocable trusts do many wonderful things, they do not help in avoiding estate taxes. The reason is that they are revocable, meaning the person who created the trust still has access to the underlying assets contained in the trust. For this reason, estate taxes still apply. That said, revocable trusts are helpful in allowing assets contained within the trust to avoid the probate process.

How does it function?

A revocable trust is created during a person’s lifetime and requires placing assets, whatever you choose, inside a trust. The trust is then overseen by a trustee who manages the property contained in the trust. While you are alive you are able to manage the trust yourself, appointing yourself trustee, though this isn’t required. You can also appoint a co-trustee to share the administrative burden and benefit from someone else to manage your affairs in the event of your incapacity. After you’ve passed away, the trustee is usually required to either distribute the assets of the trust according to your wishes or, if you choose to keep the trust up and running, to manage the assets on behalf of your beneficiaries.

How is it revocable?

Revocable trusts mean just that, they can be revoked by the person who initially created the trust at any time and for any reason. This is one of the reasons revocable trusts are popular. As opposed to irrevocable trusts, which cannot be undone once established, you always have the ability to change your mind with revocable trusts. If your plans change, if your family grows or shrinks, you can amend your trust while you are still alive to reflect these new realities.

Minnesota Living Trust Lawyer

An experienced Minnesota estate-planning lawyer can help walk you through the probate process, answering questions along the way. For more information on estate planning in Minnesota, along with a variety of other topics, contact Joseph M. Flanders of Flanders Law Firm at (612) 424-0398.

Source: “Revocable Trusts,” published at AmericanBar.org.

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MN Estate Planning | When adding your child’s name to your deed goes wrong

January 3, 2018

Titling and Deeding of Property in Minnesota It’s not uncommon as people age to start considering strategies to either avoid probate or limit assets that could be taken to pay medical/nursing expenses. One of the most well-known strategies is to simply add your child’s name to the deed of your house. Though the strategy is […]

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Trump Tax Bill and Minnesota Estate Planning

December 26, 2017

Tax Cut | Estate Planning  Its taken some serious wrangling, but Congress and President Trump have finally moved forward on one of the key Republican promises of 2016: passing a massive tax cut. There have been several iterations of the tax cut plan, some even more generous than others. As of December 22, 2017, President Trump […]

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Minnesota Estate Planning Law | The Slayer Statute

December 12, 2017

The Slayer Rule When most people think of estate planning law, they dont usually imagine much excitement. Murder, disappearance, millions of dollars and intrigue. It sounds more like a made for television movie than a probate case. But thats exactly whats happening in a case currently pending in New Hampshire. One family is engaged in […]

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Advantages of a Revocable Trust In Minnesota

November 29, 2017

Advantages of a Revocable Trust As we mentioned last week, talk of trust funds can lead to lots of confusion. Even those interested in learning more about estate planning can be overwhelmed when the topic of conversation turns to trusts. These tools are often viewed as confusingly complex and only for those with money to […]

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Should You Consider a Revocable Trust? | MN Estate Planning Law

November 27, 2017

Why Should You Consider A Revocable Trust? We’ve done a few posts on revocable trusts already. In the first, we explained more about what a revocable trust was and how it worked. In the second, we talked about some of the most important benefits of a revocable trust. Now that you have a bit more […]

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MN Wills & Trusts | Different Ways to Hold Title to Property

October 30, 2017

Different ways to hold title to property A recent article in the Washington Post involved a letter from a reader asking whether she and her husband needed to create a trust to ensure that, in the event of eithers death, the other would be guaranteed to take ownership of the family home seamlessly. The author […]

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What Is a Valid Will in Minnesota?

October 25, 2017

What is a Valid Will in Minnesota? It is very important that people understand that Wills need to be drafted and executed in the proper, legal manner. If the legal requirements are not met, a court of law could invalidate what people believed was a proper Will. Minnesota law has very clear language on what […]

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Common Mistakes Made When Handling Your Own Minnesota Estate Planning

October 19, 2017

Common mistakes when drafting your own estate plan We discussed some of the dangers of drafting your own estate plan last week as well as the questions to keep in mind if you’re thinking about doing it yourself. For those that are still determined to create an estate plan alone, there are some common mistakes […]

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