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FREQUENTLY ASKED QUESTIONS

TRUSTS

Is a living trust essential for your estate planning? The short answer might be yes, especially if you aim to sidestep the lengthy and costly probate process. Delve deeper into the reasons to avoid probate in the comprehensive article available through Bellmeyer Law. Typically, individuals with assets exceeding $150,000 or homeowners should consider a living trust as it prevents the probate fees that could average $22,000. However, for those owning a home with the rest of their estate valued below $150,000, probate might still be avoidable through a “Transfer on Death Deed,” which transfers home ownership directly to heirs upon death, bypassing probate. Yet, if your primary concern is to shield your children’s inheritance from creditors or legal judgments and maintain privacy, a living trust is indispensable.

 

The time required to develop an estate plan can vary significantly depending on individual circumstances. Clients who have a clear vision of their estate planning goals, including choices for trustees and beneficiaries, often complete the process swiftly. In contrast, those encountering the critical questions of estate planning for the first time during a Bellmeyer Law Family Legacy Strategy session may need more time to deliberate these decisions. This is entirely normal and part of a thoughtful approach to estate planning. Typically, after completing the initial questionnaire, your legacy attorney at Bellmeyer Law will prepare a draft of your estate plan within a week. Upon your approval, the plan is ready for signing and can often be executed as soon as the next day. Generally, you should anticipate the estate planning process to take approximately 7-9 days from start to finish.

At Bellmeyer Law, the journey to creating a living trust begins with a personalized consultation with your dedicated legacy attorney, who will guide you through each step of the process. Initially, after engaging Bellmeyer Law, you will complete a detailed questionnaire that gathers information about your estate and planning objectives. This allows your legacy attorney to assess suitable trust options for you and recommend the most appropriate one. Following this, your attorney will begin drafting your estate plan. Within a week, you will receive a draft of your entire plan along with a clear explanation of its components. You’ll have the opportunity to request modifications, ask questions, and make sure everything aligns with your wishes. After you approve the draft or submit any revisions, your estate plan will be finalized. Your legacy attorney will then arrange a meeting to execute the necessary documents. Once signed and notarized, Bellmeyer Law will create a digital copy of your complete estate plan and provide you with the original signed documents in a premium estate plan binder. If your plan includes basic trust funding, Bellmeyer Law also ensures that your transfer deeds are correctly recorded and that all necessary documents are filed with the County Recorder.

If you already possess a trust, the experienced legacy lawyers at Bellmeyer Law are ready to conduct a thorough review of your existing arrangements. Once you engage with Bellmeyer Law, your dedicated legacy lawyer will examine the trust to ensure it accurately reflects your current wishes and needs. They will discuss any modifications you might consider and confirm that the trust is adequately funded. This comprehensive review helps to secure that your estate planning objectives are met with precision and align with any changes in your personal or financial circumstances.

The cost to amend a trust at Bellmeyer Law varies depending on the complexity of the changes required. For straightforward amendments, which might only need a page or two, the process is relatively simple and cost-effective. However, more intricate amendments that necessitate extensive planning or significant alterations to the trust’s structure will be more costly. In certain cases, such as when removing a previously named beneficiary, a complete restatement of the trust rather than a simple amendment may be advisable. At Bellmeyer Law, the cost for amending a trust typically ranges from $500 to $1,000, reflecting the tailored approach we take to meet each client’s unique needs and circumstances.

Executors and trustees both serve as fiduciaries, entrusted with managing your estate, but their roles are distinct based on the documents that govern them. At Bellmeyer Law, it’s important for clients to understand these differences. An executor is appointed to manage the estate as outlined in a Will. This role involves organizing the deceased’s assets, settling debts, and ensuring assets are distributed according to the Will’s specifications. On the other hand, a trustee manages assets that are held in a Trust, responsible for overseeing the trust’s assets and ensuring they are distributed to beneficiaries in accordance with the terms of the Trust. Simply put, Wills appoint executors, and Trusts appoint trustees. This distinction is crucial in planning your estate effectively, ensuring that your assets are managed and distributed as intended.

Absolutely, it is not only possible but recommended to transfer all real properties you own into your trust for cohesive estate management. Bellmeyer Law ensures that every estate planning package includes the necessary deeds for transferring your real properties into the trust. Our Platinum and Legacy Packages further offer the added benefit of recording the deed for your primary residence, officially changing the title to the trust. If you own additional properties beyond your primary residence and wish for Bellmeyer Law to manage the title transfers, a fee of $250 per additional property is applicable. This comprehensive service facilitates seamless integration of all your real estate assets into your estate plan, ensuring they are effectively managed and protected under the terms of your trust.

Yes, it is indeed possible to create your own estate plan using various DIY resources available today. However, the crucial question to consider is whether such a plan will be effective. At Bellmeyer Law, we’ve explored numerous DIY estate planning services and found that while they are capable of generating documents, they often fall short in fully executing an estate plan. Crucially, most DIY solutions do not fund the estate plan, which means your family could face substantial probate fees—approximately $22,000—after your passing. For those interested in a deeper understanding of DIY estate planning services and their limitations, Bellmeyer Law has produced a series of videos on our YouTube channel that discusses each major service in detail. This series can help you make an informed decision about the viability of a DIY approach versus professional estate planning services.

At Bellmeyer Law, our fees for estate planning services range from $2,300 to $4,300, with most families typically investing around $3,300. The entry-level plan, priced at $2,300, is suitable for many families and is designed to ensure that your estate avoids the probate system. This basic plan is creative, customized, and uniquely tailored to meet your family’s specific needs. However, for those seeking enhanced asset protection and additional safeguards for their family after passing, more complex planning is necessary. Such comprehensive plans involve additional features and protections, thereby increasing the overall cost. This tiered pricing structure allows us to offer flexible solutions that can accommodate a wide range of needs and preferences.

Many people wonder whether services like LegalZoom, Nolo, and Rocket Lawyer offer cheaper alternatives to traditional estate planning through firms like Bellmeyer Law. It’s important to understand that these platforms do not provide actual estate planning services. Rather, they supply documents that may be used in an estate plan. However, possessing documents alone does not constitute a complete estate plan. Notably, LegalZoom’s own “Terms of Service” explicitly state that their forms or templates should not be seen as a substitute for the advice or services of an attorney. This distinction is crucial for anyone considering the true value and effectiveness of their estate planning options.

Estate planning is the process of proactively preparing for the future to safeguard your loved ones after your passing. At Bellmeyer Law, we emphasize that estate planning goes beyond simply distributing your assets; it involves strategic thinking about potential scenarios that could affect your family and putting measures in place to protect them. The core of estate planning is about creating a comprehensive plan that addresses various aspects such as guardianship of minors, management of assets, and directives for health care decisions. This thoughtful planning ensures that your wishes are honored and your family is cared for, even in your absence.

LLC

An LLC, or Limited Liability Company, is a business structure where the owner’s personal liability is confined to their initial investment, hence the term “limited liability.” Bellmeyer Law can help you understand the four distinct types of LLCs: single-member LLCs, where one individual owns the business; multi-member-managed LLCs, where multiple owners manage the company collectively; manager-managed LLCs, where one or more appointed managers handle the business operations; and series LLCs, which consist of a master LLC with separate divisions or series each having distinct liabilities and assets. In all types of LLCs, the owners are referred to as “members.” This structure is favored for its flexibility in management and protection it offers to the personal assets of the members.

A “member-managed” LLC is a type of limited liability company where the daily management responsibilities are directly handled by its members, rather than designated managers. At Bellmeyer Law, we clarify that in this structure, each member is actively involved in the operational decisions of the business. This arrangement is typically preferred by smaller LLCs or those where all members wish to have an equal say in the running of the company. It contrasts with manager-managed LLCs, where management is delegated to one or more specific individuals, allowing other members to remain passive in daily business affairs. Understanding the distinction between these types can help in making informed decisions about how to structure your business for optimal management and liability protection.

A “manager-managed” LLC is a specific type of limited liability company where the daily operational responsibilities are delegated to one or more managers. These managers can be either members of the LLC or external individuals appointed by the LLC’s members. Bellmeyer Law can help explain how this structure is often chosen for its efficiency in larger LLCs or for those where members prefer not to be involved in the day-to-day management of the company. This arrangement allows members to focus on broader strategic goals while entrusting the operational details to experienced managers. Understanding the benefits and considerations of a manager-managed versus a member-managed LLC is crucial for business owners making decisions about their company’s governance structure.

In California, limited liability companies (LLCs) are required to file a Statement of Information with the state every two years. This filing is crucial as it provides the state with current information about the LLC, including contact details for its primary business location and its designated agent for service of process. Bellmeyer Law can assist LLC owners in understanding these requirements and ensuring that their business remains in compliance with state regulations. Timely filing of the Statement of Information helps avoid penalties and maintains the LLC’s good standing in the state, which is essential for ongoing business operations and legal protection.

Limited liability companies (LLCs) are not subject to the same requirements as corporations, which must hold annual meetings of shareholders and directors. In general, LLCs do not have a legal obligation to conduct annual meetings. However, the specific provisions set forth in the LLC’s Operating Agreement can stipulate otherwise. If the Operating Agreement includes a clause requiring an annual meeting, then compliance with this requirement becomes mandatory for the LLC members. Bellmeyer Law can assist LLC owners in understanding their operating agreement’s stipulations and ensuring adherence to any such internal requirements, thereby maintaining the LLC’s legal and operational integrity.

Operating an LLC in California involves several mandatory costs that potential and current LLC owners should be aware of. Initially, the California Secretary of State charges a $70 fee to file the Articles of Organization, which formally registers the LLC. Additionally, a $20 fee is required for filing the Statement of Information, which must be updated biennially. Beyond these filing fees, LLCs are also obligated to submit a corporate tax return annually by March 15. Moreover, there is an $800 minimum franchise tax imposed on every LLC in California each year, regardless of the LLC’s profit or loss. Bellmeyer Law can assist in navigating these financial obligations, ensuring that your LLC remains compliant with state laws and regulations while managing its operational budget effectively.

Bellmeyer Law provides a full-service package for forming an LLC, charging a flat fee of $1,500 plus additional costs. This comprehensive fee covers all essential steps in establishing your LLC: drafting and filing the Articles of Organization and the Statement of Information, creating the Operating Agreement, obtaining an Employer Identification Number (EIN) from the IRS, and issuing membership certificates. Furthermore, Bellmeyer Law offers unlimited guidance and consultation to assist you in getting your business off the ground. Our goal is to simplify the process and ensure that all legal requirements are met, so you can focus on the successful launch and operation of your business.

CORPORATIONS

A corporation is recognized legally as an artificial person, allowing it to have rights, responsibilities, and liabilities separate from those of its owners. Managed by one or more directors, the corporation’s ownership lies with individuals known as shareholders. There are two primary types of corporations: S-Corporations and C-Corporations. The key distinction lies in how they are taxed and their ownership restrictions. S-Corporations are designed for smaller businesses with limitations on the number of shareholders, offering tax benefits as incomes and losses can pass through to shareholders’ personal tax returns. C-Corporations, conversely, are taxed separately from their owners and can have an unlimited number of shareholders. Bellmeyer Law can guide you through the specifics of each type, helping you decide which corporate structure best suits your business needs.

An S-Corporation is a special type of corporation that has chosen to pass corporate income, losses, deductions, and credits through to their shareholders for federal tax purposes by making an “S Election.” This election allows S-Corporations to avoid double taxation on the corporate income. To qualify as an S-Corporation, the entity must adhere to certain restrictions: it must not have more than 100 shareholders, can only issue one class of stock, and all shareholders must be individuals, not other corporations or entities. Bellmeyer Law can assist in navigating the complexities of S-Corporation status to determine if this structure aligns with your business objectives, ensuring compliance with IRS requirements while optimizing tax benefits.

A C-Corporation represents the default status of a corporation under U.S. law. If no specific “S-Election” is filed to be taxed as an S-Corporation, the business automatically qualifies as a C-Corporation. This type of corporation is subject to corporate income tax at the entity level, and profits distributed as dividends to shareholders are taxed again at the individual level, known as double taxation. C-Corporations provide the advantage of potentially unlimited shareholders and no restrictions on the types of shareholders, which can include individuals, other corporations, and foreign entities. Bellmeyer Law can provide detailed guidance on the implications of operating as a C-Corporation, helping you understand the regulatory, tax, and administrative considerations that come with this common corporate structure.

In California, corporations are required to submit a Statement of Information to the state every year. This annual filing is critical as it updates the Secretary of State on key information about the corporation, such as current addresses, contact details for corporate officers, and the designated agent for service of process. Staying compliant with this requirement is essential for maintaining the corporation’s good standing and ensuring continued operational legality. Bellmeyer Law can assist in managing these filings efficiently, reminding you of due dates, and ensuring that all information provided is accurate and up to date, thus preventing any potential legal issues related to non-compliance.

Corporations are legally mandated to conduct annual meetings for both their Board of Directors and their shareholders. These meetings are crucial as they serve several important functions: electing officers and directors, and voting on significant corporate policy matters. Holding these annual meetings ensures that all key stakeholders are involved in the decision-making processes that guide the corporation’s strategic direction. Additionally, these meetings provide a platform for transparency and accountability, helping to maintain investor confidence and compliance with corporate governance standards. Bellmeyer Law can assist in organizing these meetings, ensuring that all legal requirements are met and that your corporation remains in good standing with regulatory bodies.

Operating a corporation in California involves several statutory fees and taxes that are essential to understand for effective budgeting and compliance. The initial filing of the Articles of Incorporation incurs a fee of $100, and each subsequent annual filing of the Statement of Information costs $25. Moreover, corporations must adhere to tax obligations that include filing a corporate tax return every year by March 15. Additionally, the California Secretary of State imposes a mandatory minimum tax of $800 annually on every corporation, regardless of profit or loss. Bellmeyer Law can help navigate these financial requirements, ensuring your corporation meets all regulatory obligations while managing its fiscal responsibilities efficiently.

Bellmeyer Law offers a full-service package for forming a corporation, charging a flat fee of $1,500 plus any additional costs. This all-inclusive fee covers the complete setup of your corporation: drafting and filing the Articles of Incorporation and the Statement of Information, creating the corporate bylaws, preparing the initial minutes of the Shareholders and Directors meetings, obtaining an Employer Identification Number (EIN) from the IRS, and issuing stock certificates. Furthermore, Bellmeyer Law provides unlimited guidance and consultation to assist in launching your business. Our goal is to ensure a smooth setup process and to provide ongoing support as you begin your corporate journey, helping you navigate the complexities of corporate compliance and operation.

BANKRUPTCY

Many people mistakenly believe that there is a minimum debt requirement to qualify for bankruptcy, but this is not the case. At Bellmeyer Law, we explain that the primary criteria for determining bankruptcy eligibility involve assessing your debts and verifying your income. An important step in this process is the bankruptcy means test, which is designed to evaluate whether you qualify for Chapter 7 bankruptcy. If you do not meet the criteria for Chapter 7, you still have the option to file under Chapter 13 and achieve debt relief. Our team at Bellmeyer Law can guide you through these assessments, helping you understand which bankruptcy chapter best suits your financial situation and how to proceed with the filing process.

The Chapter 7 means test is a crucial step in determining eligibility for bankruptcy under this chapter. At Bellmeyer Law, we guide our clients through this test by first calculating their monthly disposable income. This calculation involves subtracting your monthly expenses from your total monthly income, which may include the income of all adults living in the same household. The outcome reveals your disposable income. If this amount is less than the median disposable income for households in your zip code, you typically qualify to file for Chapter 7 bankruptcy. This test is designed to ensure that bankruptcy relief is available to those who truly need it, preventing abuse of the system. Bellmeyer Law can assist you in navigating this process, ensuring that all calculations are accurate and that you understand your eligibility and options.

If you qualify for Chapter 7 bankruptcy after passing the means test, Bellmeyer Law can guide you through the filing process. Here are the key steps involved:

Filing the Petition: You’ll need to file a Chapter 7 bankruptcy petition, which includes financial documents such as proof of income, debts, property details, a certificate of completion for a credit counseling course, and other relevant financial records.

Triggering the Automatic Stay: Once filed, an automatic stay goes into effect. This powerful legal provision halts creditors from collecting debts, and stops any foreclosure actions on your home.

Submitting Additional Documentation: You must provide further documentation to the bankruptcy trustee or the court upon their request, typically five days before the creditors’ meeting. This may include tax returns, bank statements, payroll stubs, and more.

Meeting of Creditors: This meeting, overseen by the trustee, is usually brief and straightforward. Creditors rarely attend these meetings but have the option to.

Completing a Financial Management Course: After the meeting, you must complete a financial management course, which is a requisite for proceeding.

Discharge of Debt: Following the distribution of all nonexempt assets by the trustee, the bankruptcy court will issue a discharge of your debts, officially closing your case.Bellmeyer Law ensures you understand each step and supports you throughout the entire process, helping to alleviate the stress and uncertainty often associated with bankruptcy filings.

The duration of the bankruptcy process can vary significantly depending on the type of bankruptcy filed. At Bellmeyer Law, we help clients understand these timelines:

  1. Chapter 7 Bankruptcy: This type of bankruptcy, often referred to as a liquidation bankruptcy, typically concludes within about 3 months from the filing date. This relatively quick process involves the liquidation of eligible assets to pay off creditors and can provide a fresh financial start in a short period.
  2. Chapter 13 Bankruptcy: Known as a wage earner’s plan, Chapter 13 bankruptcy allows debtors to develop a plan to repay all or part of their debts. The process can take between 3 to 5 years, based on the terms of the agreed-upon payment plan. This type of bankruptcy is geared towards individuals with a regular income who can commit to a long-term payment strategy while retaining their property.

Bellmeyer Law is committed to guiding you through either process, providing clarity and support from start to finish, ensuring that you are fully informed and comfortable with the timeline and what to expect at each stage.

In the context of bankruptcy, a “discharge” releases the debtor from personal liability for certain types of debts. This means that once a discharge is granted by the court, you are no longer legally required to pay the discharged debts, and creditors are prohibited from taking any collection actions against you for those debts. Bellmeyer Law can help clarify which of your debts may be eligible for discharge through the bankruptcy process.

However, it is important to note that not all debts can be discharged in bankruptcy. Debts that typically remain unaffected include student loans, child support, spousal support, certain taxes, homeowner association fees, court fees and penalties, and federal loans. Understanding the scope and limitations of bankruptcy discharge is crucial for effectively managing your financial recovery. Bellmeyer Law is committed to providing comprehensive guidance on these matters, ensuring that you have a clear understanding of your financial obligations post-bankruptcy.

A bankruptcy filing will have a lasting impact on your credit report, with the record remaining visible for approximately 10 years. This extended period reflects the serious nature of bankruptcy and its effects on your financial profile. However, the impact of a bankruptcy on your credit score can diminish over time, especially if you engage in responsible financial behaviors post-bankruptcy. Bellmeyer Law can provide strategies and guidance on how to rebuild your credit after filing for bankruptcy, helping you to restore your financial health and mitigate the long-term effects on your credit report. Understanding this timeline and taking proactive steps towards credit recovery are essential for anyone who has undergone the bankruptcy process.

 

In California, bankruptcy exemptions play a critical role by allowing debtors to retain certain property from being liquidated to pay off creditors. Bellmeyer Law can help you navigate the two primary sets of exemptions available:

  1. The 704 Exemptions: These are ideally suited for debtors with substantial equity in their homes. The 704 exemptions provide robust protection for home equity, making them an excellent choice for homeowners.
  2. The 703 Exemptions: This set includes a “wildcard exemption” that is particularly beneficial for those who do not own real property or who have minimal home equity. The wildcard exemption can be used to protect a variety of properties up to a specified dollar amount, offering flexibility in what you can keep.

Understanding which set of exemptions best suits your situation is crucial for maximizing the protection of your assets during the bankruptcy process. Bellmeyer Law is experienced in assessing the details of each exemption set and advising on the optimal choice based on your specific financial circumstances.

One common misconception about bankruptcy is that you will lose all your valuable possessions to pay off creditors. However, this is not necessarily the case, especially with the right legal guidance from Bellmeyer Law.

For instance, under the 703 exemptions in a Chapter 7 bankruptcy in California, debtors can effectively protect a significant amount of their assets. You can safeguard up to $1,550 of miscellaneous personal property, plus any unused portion of the homestead exemption, which can total up to $30,825 for single debtors as of 2021. This “wildcard exemption” can cover a range of assets from cash and bank savings to personal items like books, watches, and pets.

Moreover, the motor vehicle exemption allows you to protect up to $5,850 of equity in your vehicle. For example, if your car is valued at $10,800, you can apply the full motor vehicle exemption plus an additional $4,950 from your wildcard exemption to completely shield your vehicle from being taken by the bankruptcy court.

These examples illustrate just a few of the many exemptions available that help protect your valuable assets during bankruptcy. Bellmeyer Law specializes in navigating these exemptions to ensure that you retain as much of your property as possible, providing a more secure financial restart.