Should I use a business entity for the business I am operating?
It is a good idea to form a business entity in order to protect yourself from
personal liability if there is a problem with the product or services provided to your customers.
The usual entity is either an S Corporation or limited liability company [LLC]. If you are a the
only operator of the business, an LLC is usually a good choice, since you can use a Schedule C on
your income tax return to report your income and expenses, instead of having to file a separate
corporate or partnership tax return. These business entities must be formed properly to be valid
and provide the protection you want. Generally, this means preparing the Articles of Organizations,
Bylaws or Operating Agreement, First Meeting Minutes, Member Control Agreement, and obtaining tax
identification numbers. Our office prepares these documents for a pre-set price, so you know what
the cost will be in advance. Feel free to call us for details at 345-7503.
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When does the Landlord have to return the security deposit to the Tenant?
A Landlord must return the security deposit, plus 1% annual interest, within 3 weeks AFTER receiving
the Tenant's new address IN WRITING. If the Landlord does not return the all of the deposit, the
Landlord must give written reasons for not returning the deposit within this 3 week period.
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My friends talk about giving their land to their children and keeping a life estate for themselves. Are there any risks in doing this?
Yes, there are a number of things to consider. First, you will lose control of the property.
You will not be able to sell it without your children AND their spouses agreeing to the sale.
Second, if it is sold, your children will receive a percentage of the sale proceeds. Third, if
your children have financial problems, their creditors may try to seize their interest in the
property. Fourth, there may be income and gift tax consequences. Call us for a longer list of
the issues to watch for when establishing a life estate. We provide full estate planning services.
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Does a young couple with limited assets need a Will?
Not necessarily. Without a Will, Minnesota law states that your assets are transferred to your
nearest relatives, usually your spouse and children. However, a Will lets you manage the timing of
distribution of your assets and who receives them. It also lets you choose who takes care of your
children (a guardian) if they are under 18 years old. Generally, we recommend that only one person
in a couple be named guardian of your children, instead of both of them. A Will allows you to
restrict the time of distribution of your assets to your children, if it contains a Trust. For a
Pre-estate Planning Form and to schedule an appointment, please call 345-7503, or send us your
name and address.
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What things should we consider when purchasing real estate?
First, you should have the Purchase Agreement reviewed by an attorney before you sign it. Our
office will review the Purchase Agreement at no charge. If we make changes to the agreement, we
will charge you for those services. Many times the terms of the purchase agreement are not what
the buyer and seller expected them to be, or in their best interest.
Second, it is a good idea to have a survey done on the property before closing, in order to be
sure where the property lines are located, and to see if there are any problems with buildings or
access rights to the property.
Third, consider having a "home inspection" done by either an experienced contractor or one of
the many home inspection services. These inspections frequently find issues with the home that
you will need to address after closing, and may find problems with the home that the Seller is
required to repair because of the warranties in the Purchase Agreement.
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What is a mechanic's lien?
This is a lien that a contractor or material provider can file against your real estate if you
do not pay for the work or materials they provide for the construction project. However, before
they have the right to file the lien, they usually must give you a "pre-lien" notice. If they do
not give this notice (or are not a licensed contractor), they may not have the special legal
rights granted by the mechanic's lien laws. There are many special rules and time limits that
apply to these cases. If they are not followed properly, the lien may not be enforceable.
We have handled a number of mechanic's lien cases for contractors and homeowners. It is important
that you call us as soon as possible if you think you may be involved in a mechanic's lien situation.
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Do I have protection under a "lemon law" if I buy a used vehicle?
There is a used vehicle "lemon law" that protects buyers of used vehicles. However, it only
applies if you bought the vehicle from a dealer, paid over $3,000 for it, and it has less than
75,000 miles at the time of purchase. The length of the warranty depends on the purchase price
and the mileage on the vehicle.
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What is a "like-kind" exchange?
This is a tax deferring option that allows someone selling real estate or business machinery and
equipment to exchange it for replacement real estate or machinery and equipment. There are many
requirements that must be met on such a sale. However, the income tax savings can be very
significant. If replacement property is held long enough, the income tax consequences can even be
avoided entirely. Call for details.
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May an employer deduct the cost of damaged products from an employee's
wages if the employee caused the damage?
No, unless the employee signs an agreement after the damage agreeing to this deduction.
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If my employer calls me into the office and gives me the option of
quitting, or being fired, should I voluntarily quit, or force them to fire me?
Generally, I recommend that you force the employer to fire you. If you voluntarily quit, it is
nearly impossible to collect re-employment benefits. If you are fired, you can collect
re-employment benefits unless the employer proves that you participated in any intentional,
negligent, or indifferent conduct, on the job or off the job, that evinces a serious violation
of the standards of behavior the employer has the right to reasonably expect of the employee,
OR that demonstrates a substantial lack of concern for the employment. We also recommend that
you ask for the written reasons for termination and obtain copies of your employment file, in
order that you can explain your employment record to future employers. Your employer is required
to provide this information to you at no cost.
Inefficiency, simple unsatisfactory conduct, poor performance because of inability or incapacity,
good faith errors in judgment if judgment was required, or absence because of illness or injury
with proper notice to the employer, generally do not disqualify you from re-employment benefits.
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