Limited liability companies (“LLCs”) are a hybrid entity that offer the tax advantages of a partnership with the liability protections of a corporation. LLCs offer a barrier that allow the owner to protect his/her personal assets in the event of any litigation against the LLC.

For example, if a business is set up a sole proprietorship and is sued, the personal assets of the owner are at risk. On the contrary, if an LLC is sued, the personal assets of the owner are free from potential debt, claims, or litigation.

It’s important to note that the shield from an LLC isn’t absolute. Owners are still personally liable for tortious conduct. If there’s ever a question regarding liability, it’s important to consult with an attorney to ensure you’re protected.

How do taxes for an LLC work?

LLCs use pass-through taxation which means the business’s profits go straight to the owner without being taxed at the corporate level. Taxation occurs on the owner’s federal income tax returns. This is especially important if the business loses money, the owner can reflect this on his/her own return. It’s important to consult with an attorney who specializes in business planning and taxes to ensure the business is properly set up.

How do I set up an LLC?  

First, it’s important to consult with an experienced business planning attorney to ensure that an LLC is the best fit for your business. If it’s agreed that it is, you’ll begin by picking a business name and ensuring the name is available with the Minnesota Secretary of State.

You’ll also need to file documents that spell out who owns the business and how the business will operate. For example, you’ll need to state if the business will be owned by one owner or multiple members. You’ll also need to list a registered agent, which is an individual on file the state who can accept legal papers on behalf of the LLC.

Do you file an LLC and then you’re done?

In Minnesota, you need to file Annual Renewal paperwork every year. If any changes to the business occur, such as changes in owners or members or a new principal address, you’ll need to file these changes with the Secretary of State.

To learn more about seeing if an LLC would be appropriate for your business, please call or email Kennedy Law Offices at 651-262-2080 or clerk@mpkennedylaw.com.

What is Probate?

A common misconception is that if a person has a will, their family will not need to go through the probate court upon that person’s passing. Whether or not someone has a will does not determine the need to go through the probate court. The need is determined by how the person’s assets are held and designated to be distributed at the time of their death.

What does the probate court process look like?
If you need to go through probate, one of the first things that you’ll have to determine is if you’ll be filing for formal probate or informal probate. An experienced probate attorney can held you decide which way is the best way to proceed based on individuals factors that may include: potential creditors, possible disputes, and what assets the decedent had.

Informal probate: You’ll file an application to appoint a personal representative to the probate registrar. The probate registrar has extensive training on probate matters. The registrar will review your application and the will and decide whether or not it’s appropriate to accept your application. If the registrar does not accept your application, you’ll have to proceed through formal probate. There are no court hearings if you file informally. It’s important to keep in mind that a probate registrar will sign the documents appointing you as personal representative, not a judge. An experienced probate attorney can assist you to ensure it’s okay to use a registrar and not a judge.

Formal probate: You’ll file a formal petition to appoint a personal representative to a judge. Some counties have special probate judges, other counties judges operate on a rotation. With formal probate, there is a court hearing that appoints the personal representative. In some counties, it’s mandatory to appear at this hearing, in other counties you do not need to appear unless you anticipate that someone will be objecting to your appointment. If there are no objections, you’ll be appointed as the personal representative and receive certified documents that allow you to access the decedent’s assets.

How can probate court be avoided?
The best way to avoid the need for your loved ones to go through the probate court, is by sitting down with an experienced estate planning attorney. Throughout the estate planning process, an experienced estate planning attorney should locate all of your assets and ensure that they are properly held to avoid the probate court. The attorney can assist you in beneficiary designations as well as drafting a will that is validly executed and nominates a personal representative (also known as an executor) of your estate.

The second way to avoid the probate court is if Minnesota Statute § 524.3-1201 applies to the decedent’s estate. This statute states that if the probate asset that is improperly held is not greater than $75,000 then the need to go through the probate court is avoided. Instead, a blood relative or a person with legal interest in the decedent’s property can fill out an Affidavit for Collection of Personal Property. The Affidavit allows you to recover the improperly held asset.

For any additional questions regarding probate or estate planning, please feel free to reach out via telephone (651-262-2080) or via email (clerk@mpkennedylaw.com).

A carefully crafted estate plan allows you to decide you will receive your assets at your passing. It is important to consult with an estate planning attorney to ensure the documents are properly executed. A common misconception is that if someone has a will, their family won’t need to go through the probate court. Consult with Kennedy Law to create an estate plan specific to your assets, property, and family. 

1. Decide Who Receives Your Assets
Assets that you own in your individual name at the time of your death are subject to probate. Probate can be a time-consuming, complex, and expensive process. Having an estate plan can minimize the expenses and uncertainties of probate by having clear instructions on how your assets should be distributed. Having an estate plan also helps to minimize potential disputes between family members.

2. Name Guardians to Care for Minor Children
If you die without a surviving spouse to care for your minor children (i.e., under age 18) then a guardian and/or conservator will need to be appointed by the probate court to care for your minor children. You can indicate in your estate plan whom you would trust to be the guardian and/or conservator of your minor children.

3. Name the Personal Representative of your Estate
In most instances, if you die with real property and/or assets worth greater than $75,000.00 in your individual name, these assets must be administered under the direction of the probate court before they can go to your beneficiaries. By executing a will, you can specify who you trust to serve as the personal representative of your estate. The personal representative is responsible for paying any debts and expenses, deciding how specific items with be allocated among your beneficiaries, liquidating your assets, and more.

4. Protect your Family’s Inheritance from Creditors and Estate Taxes
An experienced estate planning attorney can help minimize the risks of your assets being subject to creditors and/or more estate taxes than what is legally necessary. If you have potential creditor problems or work in an industry that is subject to litigation, there are several ways to isolate your assets from future creditors. An experienced estate planning attorney can help you navigate these complex questions and help protect your family from uncertainties and unnecessary disputes.

To learn more about estate planning, please call 651-262-2080. 

Estate plans are not just for the wealthy. Having an estate plan is important to ensure that your assets are distributed to your loved ones without confusion or dispute. Estate planning allows you to decide who will receive your assets. There are different ways to create estate plans: through a validly executed will, a revocable trust, owning your assets jointly, or filing a transfer on death (TOD) deed or beneficiary designation form. Each of these options have advantages and disadvantages, so it is important to go through this process with an experienced estate planning attorney.  

To learn more, please feel free to view our estate planning intake form or call us at 651-262-2080 to have any of your questions answered and/or schedule a time to speak with one of our attorneys.