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Dissolving an LLC, Avoiding Probate, Child Entrepreneurs, and More Legal Advice – Free Joe Friday 8/5/11

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On Tuesdays and Fridays, attorney Joe Escalante answers legal questions for free on the LegalZoom Facebook Page. Did you miss the last Free Joe? Don’t worry. We’ve got it all right here.

Jean: ok free advice?? lets see if this works?? Have a situation with a husband in navy , married 5 years, lost contact few years back. he stopped depositing supposedly half of money he got for being married? I know he got more that what he paid me?? he basically abandoned me. I ca’t get any info from anyone in military. they won’t even tell me where he is?? what can i do. he owes me lots of back pay and i would like to sue for alimony as he just stopped paying me and i have since been avicted etc!!!

Joe Escalante: This is what is called a contested divorce. If you satisfy the service requirements issued by the court in your jurisdiction, you can get a judgment without his presence. Then you run around and try to enforce the judgment. The military might take your judgment more seriously than just asking “where’s my sailor husband?”

David: In Wisconsin, after an employee is “dismissed”, how many days do I have to give them their last paycheck?

Joe Escalante: For “dismissed” employees in Wisconsin, I believe the check must be given on the next scheduled payday or within one month, whichever occurs first. If the termination is a result of a merger, relocation or liquidation of the business, final check must be given within 24 hours.

Pauline: so my legal question is, what does a motion of deposition mean? My daughter is in jail, in nevada, and her atty is filing on mon. A motion of deposition. She has been there for 3 months, only on heresay evidence. No proof of evidence.

Joe Escalante: If you are speaking of a motion “for” deposition, that is when a witness refuses to cooperate with an interview so a lawyer files a motion for the court to order the witness to be deposed so they can get them to answer questions under oath.

Craig: when selling on ebay or have an at-home startup business, when would it no longer be considered a “hobby” and treated more like a business according to IRS standards?

Joe Escalante: We don’t do tax advice here, but here’s a tasty link that might help: http://www.irs.gov/newsroo​m/article/0,,id=169490,00.​html

Jim: Joe, I’m planning to write a book-are there ways to limit my liability if someone does something stupid and blames it on me?

Joe Escalante: If you are talking about liability in connection with stuff mentioned in your book, you have the 1st Amendment to rely on, and then there’s insurance. People get E & O insurance when they release a film in case there are errors and omissions that cause liability. I suppose you could get that for a book too, but I’ve never encountered it. Usually, people rely on the 1st Amendment and case law, and a prudent editor at the publishing company.

http://www.indie1031.com/ listen to my radio show, we talk a lot about this kind of stuff. You can even call live on Sunday nights. The Friday version is on in 20 minutes. follow the link.

Teralyn: Joe, I’m a member of an LLC that is dissolving due to disagreements with its majority owner & myself. The LLC is an insurance agency and I’m the only member of the agency with an insurance license. I plan to withdraw from the LLC but I’m wondering what my rights are to continue serving my clients since I know the LLC will not have a licensed agent who can help them while the agency dissolves. California insurance code says that once I pull my license from the LLC, the LLC becomes inactive. So during that period I am at a loss as to what to do. I’m the only agent they know. My guess is to rewrite all their policies from my new agency office but, is this considered “stealing” from the LLC, or is it what I think it is: doing the right thing for the customer & putting them first. I will seek a local attorney but I need an immediate opinion since this issue is coming up very quick. Once the LLC has no insurance license, is the customer still the LLC’s, or is it the responsibility of the agent who wrote the policy? I hate calling the customer an it, really they are not property.

Joe Escalante: Interesting, on the one hand you have a fiduciary duty to your fellow members of the LLC, on the other hand you have a duty to your clients. It sounds like this could be a problem for you if in court if they have a decent argument that you are trumping up all the so called differences just so you can get all the clients to yourself so you don’t have to share the profits with others. Sounds risky.

Brian: What is the best way to dissolve a LLC where one member is unreachable and has been for two months? State is SD. Or keep that one going and start a new one with the current members?

Joe Escalante: If you start a new one without dissolving the old one, and the absent member returns with a good excuse, you could be liable for breaching your fiduciary duty to that member. You need to read your operating agreement and see what it says about buyouts and dissolution.

Michelle: Thank you Legal Zoom and Joe! My question: I have started a non profit company with a board of directors, we are buying land, (to build a shooting complex), we were advised to start a trust to purchase the land. What is the first thing I need to do? and can we do it ourselves?

Michelle: A little background- in Texas, listed as a non profit CORPORATION with the Sec of State. pending 501(c)(3) paperwork, owner finance land, no real estate agents or such, simple contract, and I just want to know if we REALLY should do a ‘trust’ to put the land name in.

Joe Escalante: In many cases a trust is a 501 c 3 qualified entity. This is a tricky area. You should consult an attorney in Texas. And read this from the IRS: http://www.irs.gov/pub/irs​-tege/eotopica03.pdf

Paul Anthony: Hi! Here’s my legal question: I recently partook in an online consumer survey. For my participation, I was to receive a $5 check. My check arrived, but it was in the amount of $25. Is their screwup my gain, or am I legally bound to notify them/return it? BTW, I am in California & they are in Colorado. Tahnks!

Joe Escalante: Cash it guy.

Michael: Hi Joe…well my 2nd mtg/HELOC is foreclosing on us since we are $ 1500 past due on a 30k note…and trying to buy out 1st which is $ 109k ( insane ) What can we do legally to stop/slow this so we can get the $ to pay to end this ? Thanks ( btw in Oklahoma )

Joe Escalante: If you really want to stop this, you need to hire a reputable real estate attorney in your area. Check Attorney Connect link below and start interviewing.

LegalZoom: Here you go, Michael: http://attorneyconnect.leg​alzoom.com/

Carol: i am changing the house over in my name ,my husband is deceased, is there any repercussions that i need to know?there is no estate. thankyou.

Joe Escalante: Unless the house was in a trust to which you are the beneficiary, or if it was owned as joint tenants with right of survivorship, it needs to go through probate most likely or you won’t be able to change the name on the deed. The County Recorder is usually helpful with this kind of stuff. Repercussions? I don’t have enough info to tell you that. Thanks.

Gina: my legal question:at divorce settlement meeting, I gave permission for my 3 kids to stay living in the family home w/their father until another hearing date. Since this time, my divorce has been finalized and no other hearing was/is scheduled (no $). My ex has not allowed me to see or speak to the children for 2 yrs. now (since divorce settlement meeting). Every time I’ve called to ask if I could speak to the kids, my ex tries to file a restraining order on me. Is there ANYTHING I can do?

Joe Escalante: You should file with the court for custody of your children and make him demonstrate to the court why he feels it is in the best interest of the children to be prevented from seeing their mother. If you are exercising reasonable methods of attempting to contact your own children, including knocking on the door, I don’t think he could get a restraining order to prevent that.

Daniel: Im about to roll over my 401k into an IRA. If i use a govt grant for most of my tuition, can i still take a hardship withdrawal to use for school expenses from my IRA and avoid that 10% early withdrawal penalty?

Joe Escalante: This is tax stuff, not legal issues. Consult a tax pro, thanks.

Jill: Hello Joe….my husband and I are 62 (still working) & 64 (retired) and this is our 2nd marriage. We know we need a will etc…..please clue us in on exactly what we should do. Many thanks!

Joe Escalante: If you own property and want to leave it to someone when you die, you should consider putting the property in a trust to avoid probate, which is a long and expensive court process. If your property is held as a joint tenancy with right of survivorship, and one spouse dies, it will pass to the other without probate as well. So at least get a will (from Legalzoom of course) but read all the info on a living trust to see if that is right for you. A trust usually contains a will for all the stuff not mentioned in the trust.

Nick: Dear Joe,
I continually get emails from Legal Zoom saying i need to file my PRIVILEGE SALES TAX for my business. I thought I only had to do that once a year. How do I know when I am required to file taxes?

Joe Escalante: I’m a lawyer and that sounds like a tax question. Consult a tax pro or call customer service for clarification from Legalzoom.

LegalZoom: Hi Nick! You can give us a call at 800.773.0888.

Khaya: Hello Joe, My question for you is that I have a home based business and I recently moved to a new state but I started LLC with a different state. If I applied for an authority to do business (Certificate of Authority) in the new state will I pay state taxes in both states? I’m weighing my options to either get a Certificate of Authority or disolve the LLC in the old state and start a new one in the new state.

Joe Escalante: I don’t really answer tax questions but in my book, if you are not doing business in the original state, there are no taxes to pay there because no income is being earned there. Check with a tax pro to make sure. Thanks.

Courtney: This one’s for Joe!
Recently, my business partner/roommate/friend and I set up an LLC together. However, we’ve recently realized adding “business partners” to our already close relationship might not have been a good idea.
How difficult is it to either make one person the sole member of the company or dissolve the company all together?
Thanks!

Joe Escalante: This should be in your operating agreement. Operating agreements usually spell out buy – sell stuff and dissolution rules. If you don’t have one, you are at the mercy of state laws regarding this kind of stuff and that will take some research. Better to have an operating agreement.

Patrick: How can i obtain a company vehicle with advertisement of my company logo on it and write it off on my taxes?

Joe Escalante: You can purchase one, steal one, or get some desperate lady to give you one. As far as taxes go, you have to talk to your tax professional to see what’s legit as far as write offs go. Sometimes writing off individual expenses is illusory due to the standard deduction for which you may qualify.

Ted: Hello. I am buying an existing business in California. One business I like is currently set up as an LLC. Because the business has various licenses in place, the easiest way to purchase would be a stock sale. I realize the potential risks with this type of transaction but is there any way to mitigate the risk here that would make sense? Would a seller indemnification offer that protection? (but that depends if you can find the seller)

Joe Escalante: Indemnifications are nice pieces of paper, true, but I’d rather have it backed up by a bond, insurance or perhaps the old fashioned Letter Of Credit for a note payable upon the occurrence of some agreed upon act.

Rocky: I know I should have my home in an “entity”, not my own name. What kind of entity?? Would a “Family Trust” work?

Joe Escalante: You don’t have to have your home in an entity. Everyone’s situation is different. Read legalzoom’s info on Living Trusts. They are easy to create and can help avoid probate if that is necessary for your situation. Check link below.

LegalZoom: Here’s the link, Rocky: http://www.legalzoom.com/l​iving-trusts/living-trusts​-overview.html

Eddie: what generally happens at the 1st hearing in a divorce case? btw im from ohio but figured maybe there was a general type of thing

LegalZoom: Every jurisdiction has different local rules, but generally, an initial hearing is scheduled to set temporary agreements regarding child support, spousal maintenance, a parenting plan and financial matters.

Rhonda: Need a will what do you advise?

Joe Escalante: Being a company man, so I advise you to read the link below, it’s easy:

LegalZoom: Here’s more info on wills, Rhonda: http://www.legalzoom.com/l​egal-wills/wills-overview.​html

Julie: Joe-Legal Zoom created a will for me (I reside in NC), and a clause for probate was included; however, I do not wish my family to have to go through the probate process. Why was this clause included, and how can it be removed? Thank you in advance – and thank you for being there.

Joe Escalante: To avoid probate, you need to place your assets in a trust, or some states have a probate avoidance method for “small estates.” Call customer service to see if you received the correct document.

LegalZoom: Give us a call, Julie: 800.962.7490

Angela: We want to encourage an entrepreneurial spirit in our 10-year-old. Can she start a business? Or does she need an adult partner?

Joe Escalante: She can start a business but according to state law, contracts to which she is a party may not be enforceable prior to reaching the age of 18, or whatever the state says is the age you can contract. People doing business with her might be taking a risk in this regard.

LegalZoom: That’s it for Free Joe Friday! Thanks for joining us and a big thanks to Joe for his sage advice. Have a great weekend and don’t forget to come back on Tuesday for more Free Joe! http://zoo.mn/FreeJoe

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August 9th, 2011 at 6:29 am