Alpine’s Attorney

What, exactly, is the difference between an Will and a Trust?

A Trust is more encompassing than is a Will.   Typically, a Will is one of a group of documents prepared at the time that the Trust is prepared.    A will gives directions to an executor of an estate on how to disperse the estate.  Before an executor can act, he or she must be appointed by the court which demonstrates that a Will will always require a court action.  That court action is called a probate proceeding .  A Trust is a legal vehicle designed to avoid the time, expense and rigors of a probate proceeding.

Here is an analogy to help you understand how he Trust works and why it is useful for you:

A Trust can be thought of as a virtual treasure chest.  The idea is that the Trust is created, and it becomes a legal entity.  The person or couple (hereafter person) who owns the Trust is the Trustor, or Settlor.  The Trustor puts his possessions into the Trust treasure chest and names the persons who are authorized to remove anything from the Trust treasure chest.  The people allowed to put things into the Trust treasure chest or take things out of the Trust treasure chest are called Trustees.  The first, or primary Trustees will be those who put the possessions into the Trust treasure chest, and typically, they are the only ones allowed to take anything out of the treasure chest.  However, in the event the last of the original Trustors becomes incapable of handling the Trust, the successor Trustee, who was named for the specific purpose of handling the Trust assets during the incapacity of the primary Trustees can then begin to administer the Trust for the benefit of the Trustors.  What that means is that if the original Trustors become ill and incapable of handling the Trust themselves, or die, the property remains in the Trust and under the control of the Trustee who is required by law to administer the Trust for the benefit of the Trustors while they are alive, and for the benefit of the Trust beneficiaries after the death of the last Trustor.  One of the documents that tells the successor Trustee how to administer the Trust is the Will.  The Will gives the Trustee instructions on how the state is to be divided and upon what terms.  If the Trust is properly written, in a clear, concise and understandable way, there may be no need for any court to become involved.  The estate can be disbursed according to the wishes of the original Trustors in whatever way the original Trustors established.  Because there is no probate proceeding the cost of administering the Trust is far less than is required in virtually every probate case.

Because a Trust is more far-reaching than a simple Will, the expense is somewhat greater than would be incurred if only a Will were written, but the savings to the estate can’t be enormous.  Unless a person does not expect to own any real estate or have an estate with a value of over $100,000 at the time of his death, that persons beneficiaries would be better served if Trust documents were prepared rather than only a Will.

Estate Planning

Q.   Since I am starting a business, should I incorporate or form a limited liability company?

A.  Whether to incorporate or to become a limited liability company (LLC) depends on how much you have to lose as compared to the $800 per year it costs to retain the protections offered to businesses in California.  If you don’t add the layer of personal protection that comes from taking advantage of one of these business options then all your (any your spouse’s) personal wealth may be on the line in the event that your business spends more than it takes in and has to shut down or if you or an employee causes injury or damage to another.  Since closing within the first 2 years of operation is the norm for the great majority of new businesses, and since stuff does happen, one must think carefully before ignoring the financial protection the law allows.  This attorney has seen enough of business difficulties and business liabilities to recommend the protections that are available under California law.

Q.  Well then, what will it cost to incorporate or launch a limited liability company?

A.   $500 or less should do everything needed to incorporate or become an LLC, including the filing fees, the attorney fees, the seal and minute book.

Q.  What is the difference between a corporation and an LLC?

A.   The corporation is the old work horse of business organizations, it offers its stockholders the opportunity to invest in a business while avoiding the personal liability that comes to sole proprietors when an owner or employee of the business causes financial loss or injury to another person or business.  Before corporations existed, if a business owner’s horse ran over an unsuspecting (or even a suspecting) pedestrian, the business owner could be held personally liable for that injury.  On the other hand, if the horse and employee were employed by a corporation, then the corporation could be held liable, but not the stockholders.  So, the stockholders only stood to lose their investment in the corporation, not their house and home.

The major drawback to incorporating, in modern times, was that the corporation was a legal person and was taxed on its profits, and then when it paid out dividends, the stockholders receiving those dividends were also taxed.  Stockholders thought it unfair to have to pay the tax twice on the same income.  Consequently, a different kind of taxation was made available to some corporations under sub chapter S of the Corporations Code.  Accordingly, and not surprisingly, these corporations were known as sub chapter S corporations.  Another obstacle to some corporations was that the bylaws were long and complicated and difficult, or at least expensive, to alter.  The bylaws of corporations are set by the sovereign state of California and do not necessarily provide the organizational structure that the principals of the business want.

Enter the LLC (limited liability company).  The LLC answers the difficulties presented by corporations while giving the liability protections enjoyed by stockholders in a corporation.  One major difference is that an LLC is not taxed.  The profits are taxed to the members (the LLC term equivalent to stockholders) as if the profits went directly into the pockets of the members.  Therefore, to pay the taxes, many LLCs distribute enough of the profits to cover the taxes if they don’t distribute much more.

The other major difference is that the Operating Agreement (equivalent to the bylaws of a corporation) can be as simple and brief or as complicated as the original members wish them to be.  The point is that they can be very flexible compared to the bylaws of a corporation.

Q.  Wow, at $800 a year, California is an expensive place to have an LLC or corporation.  I heard that Utah LLCs only cost about $20.00 a year.

A.   Right you are.  If you wish to incorporate or create an LLC in another state, you are welcome to do so, however, if you want to do business in California, you must register in California and pay the same amount as if you began here in the first place.  If you want to pay fees in two states, be my guest.

There is lots more to know about LLCs and corporations in California.  If you have questions, please feel free to contact me using the info on the panel over there   ———>

Carter F. Johnston

Corporations & Limited Liability Companies

Q:  I was caught red handed and got a traffic ticket in San Diego County, California.  Yep, I did the dastardly deed and now I am facing traffic court.  Can I get out of this one?

A: Interestingly, you have a couple of chances to beat this rap even though you are, or at least feel you are, as guilty as sin.   Guilt is not really the issue here.  The real issue is whether there is enough evidence to prove, beyond a reasonable doubt, that the infraction was committed, that you were the perpetrator, and that there was no legally cognizable reason to have committed the infraction.

Here is what I can do for you.   For the temporary and minuscule, paltry fee of  $49.00 I will shepherd you through the process called Trial by Declaration and help you write your defense.  You won’ t have to go to court to plead not guilty and you might not have to go to trial.  Even if you do have to go to trial, you still have a chance of having your case dismissed without even saying a word.  If you would like to discuss your particular need, use the contact information over there on the right side.   I answer the phone myself.

Carter Johnston

Traffic Tickets

If you or a family member was injured in an automobile collision you have rights regardless of fault.  There is a very good chance you may lose some or all of your rights to recover if you speak to an insurance adjuster before you are instructed on your rights and responsibilities by a competent attorney.  Therefore, your best option is to speak confidentially to one or more attorneys before you give statements to insurance adjusters, and in some cases before you speak to the police.

IF YOU WERE NOT AT FAULT

When another person is negligent and caused a collision between and automobile and virtually anything else and you suffered personal injury and/or property damage because of that negligence, you have the right to be made whole.  That means, you are entitled to be paid for your injuries and damages and put back in the condition you and your property were in before the negligent acts that caused you damage.

Some of the ways you might have been damaged include the following:

Personal Injury (including medical bills and pain and suffering)

Property damage

Loss of income

Out of pocket expenses that would not have been necessary but for the negligence of the other party.

In addition, your spouse, if you are married, may have his or her own claim for the loss of the services, society and companionship that you formerly provided but were unable to temporarily or permanently.

If you were a spectator when a close family member was injured, you might also have a claim for the trauma you endured at seeing a loved one being injured.  This might apply if you see your child being struck by a car driven by a negligent driver or some similar situation.

IF YOU WERE AT FAULT

This is the circumstance for which you purchased liability insurance.  Regardless of how badly you feel about the accident and your part in it, DO NOT ADMIT LIABILITY AT THE SCENE or later for that matter.  Your job at the scene is to make sure that everyone involved is safe and comfortable and has whatever medical attention is needed.  When the investigation is conducted, do not conclude that you were at fault.  Only state the facts about what did or didn’t happen.  It will be up to others to determine the fault and you can hurt yourself severely by taking that determination out of the hands of the investigators.

Do not leave the scene before giving the other parties all the information needed to contact you and your insurance carrier.  If the police investigate, cooperate by giving true facts and do not try to assess fault.

There is lots more to tell you.  If you have specific questions I am here to answer them for you.  Use the contact box on the right or call me.  I am in Alpine, CA, but the information I can give you will apply anywhere in the state.

Carter Johnston

Personal Injury

As a general rule, the custodial parent has the upper hand in a move-away case.  When the custodial parent wants to move away, the non-custodial parent, assuming he or she is not planning to move to the same community as the custodial parent, has an up-hill but not impossible battle ahead.   The non custodial parent cannot prevent the custodial parent from moving, only from taking the child along with.   Therefore, the only way the non-custodial parent can prevent a move-away is to become the custodial parent.    What follows is what a court counts as important in deciding whether the custodial parent remain the custodial parent:

THE BEST INTERESTS OF THE CHILD

This is what the court couldn’t care less about:

How well or badly the other parent treats you, and the corollary, how well or badly you treat the other parent.

Now, back to what the court does care about:

The court will consider which parent will be better able to provide the child with clothing, shelter, food, education and safety, although not necessarily in that order.  If the court decided that the non-custodial parent is best able to provide for child in the way the court wants, whether the child would nevertheless, still be better off moving with the custodial parent.  Other considerations include whether either parent is or is not addicted to anything and is not wanted for a crime.  However, whether or not the parent is living an amoral lifestyle is of little or no impact on the decision of the court as to which parent is better suited to be the custodial parent.

If you would like additional information on this topic, please feel free to call or send an email using the info there on the right panel.  I respond to all the calls and when I am not in court or with a client, I will answer the phone myself.
Carter Johnston

Family Law