Q: What type of entity should I form?
A: Limited liability companies are the most often selected entity in large part because they are easy to set up, give you great flexibility and do not require the same level of formality as a corporation. However, for businesses that will have investors or some professions, corporations or service corporations may be the right choice. General partnerships and sole proprietorships leave the owners personal assets subject to liability and therefore may not be the best choice.
Q: Once my entity is formed what’s next?
A: You may need to consider licensing/registration. If your work is in a regulated industry like massage, healthcare, barbering, hairdressing, you may need to have a license and your entity may separately need a license.
You may also need a federal and state tax identification number for income tax, sales tax, and withholding if you will have employees.
Q: When should I get my lawyer involved if I am buying a business?
A: Working with a lawyer and accountant early in the process helps to decide on the proper structure of the transaction and identify issues that might affect the price and when the transaction should close.
Q: I have a realtor do I need an attorney too?
A: The simple answer is you decide. An attorney usually reviews the offer (if already drafted and or accepted) to be sure he/she understands the transaction. An attorney will advise you on:
- Potential solutions and your rights and responsibilities if there are issues resulting from a contingency (inspection, financing, testing).
- Review of the title insurance commitment and discuss the removal of various exceptions with the seller’s attorney or title company.
- Review the preliminary closing statement to be sure that all credits and charges are properly shown and attends the closing to assist with the loan documents.
Q: If I’m buying a parcel of commercial real estate are there any special contingencies I should consider?
A: With commercial real estate you may want to have contingencies to do soil testing (environmental issues), confirm zoning for the intended use, allow for subdivision of the parcel or conditional use. Having your lawyer assist you with the offer or review the offer before it is submitted to the seller will
Q: I only have a few assets do I need an estate plan?
A: Everyone that owns assets “needs” an estate plan. The real question is whether the state provided plan is right for you. The state statutes specify who is entitled to your assets if you do not leave a Will. If you’ve been married before, have children from a prior relationship, want to make gifts to charity, or want gifts for children to be held in trust then the statutes do not adequately provide for your wishes and you will want to have a Will or revocable trust drafted.
Q: What does a Personal Representative (PR) do?
A: The PR will administer your estate and distribute your assets to your beneficiaries, as you’ve directed in your Will. You can choose almost anyone who is an adult and is legally competent to serve. Frequently, people choose their spouse, a sibling, a friend, or a business associate. You can also name a corporate PR, such as a bank trust department.
Q: What does a trustee do?
A: If you plan to include a trust as part of your estate plan, you will need to name one or more trustees. A trustee is the person or entity entrusted with the management of property placed in trust. The trustee must invest, distribute, and manage the trust property until the trust terminates. Often a trust will continue for several years until the ultimate distribution of the trust assets. You can select a person with financial management strengths or a financial institution as the trustee. However, there is no legal requirement that the trustee possess these skills. A trustee may always seek professional expertise if he or she desires.
Q: If I have a Will is there anything else I need?
A: In addition to Wills and trusts, people should consider additional documents as part of their estate plans.
Durable Power of Attorney for Financial Matters. A durable power of attorney for financial matters designates someone else to handle your financial affairs if you are unable to tend to these matters yourself. Generally, the person designated has all the authority that you would have to handle your financial affairs. Wisconsin’s power of attorney statute for financial matters was recently updated to provide for more clarity in the powers granted to the agent and greater acceptance of powers of attorney by financial institutions, insurance companies and others.
Durable Power of Attorney for Health Care. A durable power of attorney for health care designates someone else to make decisions for you if you are unable to make those decisions yourself. The scope of a durable power of attorney generally goes beyond that of a living will. While a living will usually is concerned with the withdrawal or withholding of life support treatment in the event you become terminally ill, a durable power of attorney for health care can address nearly any healthcare decision and can give your agent the authority to make decisions regarding withdrawal or withholding of health care for you.
Marital Property Agreement. Because Wisconsin is a marital property state, there may be a need to classify or reclassify assets both to aid in estate planning generally and to incorporate tax planning benefits into the estate plan.