What Is The Purpose Of A Durable Power Of Attorney?

Power of attorney gives a trusted individual the right to make decisions and take actions on your behalf. A durable power of attorney is most often used by seniors to give another person the authority to act in their name in medical and legal matters, including those about property, taxes, business deals and real estate. It is also known as a continuing power of attorney because it will continue even if the principal; the person granting the authority, becomes mentally incapacitated or incompetent.  

The documents drawing up a power of attorney (POA) can be particularly about the purposes and duration for which it is conferred. The agent is usually a trusted friend or close relative who can be relied upon tomake decisions in the best interest of the principal when he or she can no longer do so. For seniors and their families, it’s best to plan and set up a durable power of attorney, especially for medical matters, well before it will be needed.

What Is A Durable Power Of Attorney?

A durable power of attorney is also known as a continuing power of attorney and remains in effect even if the principal becomes mentally incapacitated and incapable of taking or communicating decisions. Different states have their power of attorney forms which state the conditions and duration of the POA,as well as the start date. These forms must be filled out completely and correctly for the POA to become effective.

What Is A Power Of Attorney? 

Power of Attorney gives a trusted individual the authority to act on your behalf. It can pertain to legal or medical matters or just be limited to a single task. The scope and duration of the POA can be specified in the document. The person delegating the authority is called the principal, and the individual who is given the authority is called the agent or attorney-in-fact.

Types Of POA

courthouse hammer

Image via Pexels

There are two types of POA: medical and general. General Power of Attorney gives the agent the authority to act for the principal in financial and legal matters like property and real estate, business, taxes, lawsuits and in dealings with the government agencies such as applying for benefits.

Medical Power of Attorney typically gives the agent the authority to make decisions regarding medical matters and healthcare. It is sometimes named differently in different states and may be known as Health Care Proxy, Designation of Health Advocate, Designation of Healthcare Surrogate, etc.

Both types of POA can continue even if the principal becomes mentally incapacitated if the word “Durable” is added.

Defining The Scope Of Power Of Attorney

The scope of POA can be defined so that it is limited to a specified matter or duration. The limits are clearly specified in the document. A durable power of attorney remains effective even if the principal becomes mentally incompetent. The state of being mentally incompetent is defined as the inability of the principal to make an informed decision or of communicating such decisions. In fact, this is why seniors and their families should plan and set up durable POA well in advance of it becoming necessary.

Mental incapacitation can result from mental illness or physical injury which affects the functioning of the brain. This includes strokes, coma, paralysis, etc. For seniors, it may stem from the onset of diseases like Alzheimer’s and dementia. In general, certification from a medical doctor is required for a POA that springs from mental incompetency.  

How Long Does Durable Power Of Attorney Last?

lady statue of justice

Image via Pixabay

The durable power of attorney comes into effect when the form is properly completed unless specified otherwise. Alternatively, a “springing” durable power of attorney springs from an event such as the mental incapacitation of the principal, which is specified in the document. Durable POA typically ends with the death of the principal unless an ending date is specified.  

When Is A Durable Power Of Attorney Used?

A durable power of attorney is typically used when seniors need someone else to make decisions and take actions on their behalf in medical and legal matters. This may be done in the event of a sickness or injury or just because the principal needs help with managing affairs such as medical care, bills, and legal matters. It continues if a senior cannot make informed decisions about these and other matters. For seniors and their families, it is usually best to plan and establish a durable POA well before it will be needed.

Durable POA may also be needed if an injury or illness makes it impossible for the senior to communicate such decisions. For example, a disease such as a stroke may make it physically impossible to speak or communicate by any other means, even if mental functions are unimpaired. Many seniors may just choose to delegate durable POA to a trusted individual because they need someone to act on their behalf in making decisions regarding medical care, managing social security, applying for benefits, paying bills, etc.

Planning Ahead

man and woman shaking hands

Image via Pexels

Seniors and their families should plan and prepare for a durable power of attorney, especially for medical matters. In case of an accident or injury, or the onset of Alzheimer’s or dementia, it will save time, money and trouble if a trusted family member or friend can step in and take over the decision about medical care and treatment. It’s best to be proactive rather than wait too long and risk a situation where the principal is no longer capable of making a decision about choosing an agent.

If a senior does become mentally incompetent due to injury or illness without establishing a durable POA, relatives will have to go to the courts to make decisions about their medical care and treatment. This can be expensive and time-consuming and distract their efforts at a time when the medical care of the individual should be the highest priority.

What Are The Advantages And Disadvantages Of A Durable Power Of Attorney?

Durable POA is a relatively easy way for seniors to get help in managing their affairs without the intervention of a court. Even if there is no serious medical condition or emergency, it can be helpful to have someone who can manage financial and legal matters for them. It’s important to have someone who can make decisions about medical treatment and long-term care if and when the need should arise.

On the other hand, there is great potential for fraud and abuse in this position of trust, and unfortunately, this does happen very frequently. One way to prevent against fraud and embezzlement is to specify the limits of the durable POA.

Benefits

finance plan board on a wooden surface

Image via Pixabay

Durable POA allows your agent to help you make decisions about medical care and deal with financial matters like bank accounts, taxes, social security, insurance, property, etc. Your agent can deal with third parties like banks, credit card companies, and government agencies and programs like Medicare and social security on your behalf. They will have to provide a letter of attorney to establish this authority.

A durable power of attorney is a relatively easy way for seniors to manage their affairs without the intervention of a court. The terms and limits can be specified. Durable POA ends with the death of the principal, which means that the agent does not have any control over the estate unless that is specified elsewhere.

Disadvantages

While there are many benefits for seniors in giving durable POA to someone they trust, there is always the risk that this trust may be abused. Fraud does happen, and it can be a way for an agent to embezzle funds and transfer property to themselves or others. They can even change the names of beneficiaries on life insurance policies and annuities to benefit themselves.

In some cases, an agent may not be acting from malicious intentions but still fail to carry out the wishes of the principal. As in all matters, mistakes can be made. If fraud is detected, by the principal or the heirs, the agent may be sued for the return of assets as well as damages.

Can Durable Power Of Attorney Be Revoked?

court hammer and scale

Image via Pixabay

A durable power of attorney can be revoked at any time by the principal provided he or she is of sound mind. A properly-drafted statement of revocation will have to be given to the agent as well as to any third parties with whom the agent has had dealings in that capacity. If the agent is a spouse, the durable POA is automatically revoked in case of divorce.

Durable POA is automatically revoked on the death of the principal, and the agent has no control over the estate unless specified elsewhere.

Conclusion

A durable power of attorney helps seniors by giving a trusted individual the authority to act on their behalf in medical and legal matters. It can be important in situations where the principal becomes mentally incompetent to make informed decisions due to injury or illness. Durable POA is a way for seniors and their families to manage their medical and legal affairs without the intervention of the courts.

Your Guide to Choosing a Patent Lawyer

It's an exciting thing to come up with an idea worthy of protection. Most people on this planet will never know what that sense of pride feels like. So if you have created an original product idea or concept, we think it would be wise to take the proper steps to protect it. You need a patent, and this is where a patent lawyer comes into the picture. You have the idea, also called a piece of intellectual property; your patent lawyer has the knowledge and resources to help you apply for that patent and then enforce it if infringement occurs down the line.

What Is a Patent Lawyer?

A patent lawyer specializes in obtaining and protecting patents. They represent clients in all manner of procedures pertaining to patent law and an intellectual property practice. If you are an inventor, innovator or creative type with an idea or product you want to protect from ever being stolen from you, then you would benefit greatly from the services of a patent lawyer.
As in most other areas of law, it is possible to obtain a patent and attempt to protect your intellectual property without a lawyer. However, patent law is very complex and, to the untrained mind, it can be overwhelming. Patent lawyers help keep clients safe from loophole exploitation and other damaging attacks that can result from technical mistakes and going it alone.
You may hear the terms "patent attorney" and occasionally "patent agent" in place of "patent lawyer," but don't be confused. "Attorney" and "lawyer" are used interchangeably in the United States, and both patent attorneys and patent agents have the same license to practice and represent clients before the United States Patent and Trademark Office (USPTO). However, there is a major, key distinction between a patent attorney/lawyer and a patent agent.

Patent Attorneys vs. Patent Agents

Key Aspects of a Patent Lawyer's Role

When to Hire a Patent Lawyer

Again, maybe you have a great idea and now you need to protect it. Or perhaps you are planning ahead for the invention or concept you've been working on.
It's time to consult a patent lawyer. They are incredibly effective in protecting intellectual property rights; after all, that is basically the job description.
Below, we'll cover a few reasons why hiring a patent lawyer is an intelligent decision for any creative individual, artist, or corporate entity looking to register and/or defend a patent.

Defending a Patent

Familiarity with Current, Evolving Intellectual Property Law

International Law & Protections

How to Choose a Patent Lawyer

Before you make any major public disclosure of your idea or invention, you should find the right patent lawyer for your situation. First, this attorney should be qualified and registered to practice before the USPTO.
In addition to a law degree and license, however, you may wish to find a qualified and registered attorney with a technical background in the sciences or other expertise relevant to your specific invention.
So don't settle for just anyone with a law degree; there are brilliant patent attorneys out there that will serve you wonderfully if you do your homework and compare their backgrounds.

Shop Around to Find the Right Fit

Consider an Attorney with Expertise in Your Specific Field

Discuss the Total Cost of Obtaining Your Patent

Determine if the Firm Also Does Litigation

Conclusion

lawyers discussing something

Image source: pxhere

With so many people and so many corporations on the planet today, a unique idea or invention is a treasure. Historically, some people buried their treasure to protect it. Today, a successful patent application is the first step in protecting your treasure from others trying to profit from your intellectual property at your expense.
There are many things to look for when trying to choose a good patent lawyer. Above all, your choice should be someone you trust and with whom are able to build a strong working relationship.
Your lawyer should your best interests always in mind and be there for you through every part of the patent application and protection processes. Keep these points in mind when searching for the right patent lawyer and you'll surely be in good hands.

Featured Image: Image by espartgraphic from Pixabay

How To Make A Will: Understanding The Legal Process

Do you want to prepare your last will and testament to leave a legacy for your loved ones and family members? Have you been scouring the internet, trying to determine all the legalities involved but are not sure where to get started? Learning how to make a will is not nearly as complicated as you may think, but there are key elements to consider when creating yours. Whether you are just thinking about making a will or are on the fence as to if you even need one at all, our comprehensive guide will give you the tools you need to move in the right direction.

What Is A Will?

Overview

In simplest terms, a will is a legally binding document that details your last requests in the event of your death. The person creating the will is known as the testator. The requirements involved for how to make a will legally binding diverge based on state. It is important to know of some general mandates to make sure you follow each step to the letter.

Key Elements 

There are key elements to know of when learning how to make a will. To begin with, a legally binding will must always be put down in writing. Depending on your state, a handwritten will may suffice. However, only around 25 of the 50 states acknowledge handwritten wills as legally binding, so check your state regulations for further information. If you can use a handwritten or holographic will, it must be composed, signed, and dated by you alone.

A small fraction of states will acknowledge oral wills, known as nuncupative wills, usually in rare instances such as deathbed requests. Several states will also recognize a video recording of your last will and testament. However, it is always a good idea to obtain legal counsel before going this route, as many states do not accept them and they are often best suited to accompany an actual written will.

career woman holding a sheet of paper

image source: pexels

When learning how to make a will, you must carefully compose the body of the will to include any beneficiaries you choose. The body must name any people you will leave your possessions and estate to, like your spouse, children, other family members, and friends. In the event that you are purposely leaving someone out of your will, you must spell this out in the document.

If you have minor children, you will want to list the individual you are appointing as their guardian in the will. A valid will must also list each possession and the piece of property you will bequeath, with instructions for how they are to be relayed to the beneficiary. Exceptions to this rule would be an insurance policy or if your estate is under a joint tenancy, in which case your assets automatically go to the living beneficiary or tenant upon your death. Finally, your will needs to name the executor of the document and an alternative choice in the event that the former cannot perform his or her duties.  

Do You Need A Will?

last will and testament copy

image source: unsplash

In a Nutshell

One of the main considerations that arise when considering how to make a will is if you even need a will. No matter how small your assets may be, it is always a good idea to create a legally binding will so your property does not get caught in probate or go through unnecessary channels before reaching your preferred beneficiaries.

It may be difficult to think about and plan for your death. Yet, it is far better to prepare for the unexpected for the sake of your loved ones and to ensure that your property transitions to the individuals of your choosing.

Things to Consider 

If you were to choose not to make a will, your property would automatically pass to the state upon your death, leaving them responsible for determining who they transmit it to. If you are married and have children, in most cases your assets will pass directly to your spouse and kids. If you do not have a spouse or children, the state will usually bequeath those assets to your closest relatives.

In the event that none of these individuals exist as beneficiaries, your assets become the property of the state. If you have children, it is even more imperative to learn how to make a will. If you do not have a will drawn up, upon your death, the courts will decide who your minor children and property will go to if your spouse or the children's other parent is not of sound mind to care for them.  

How To Make A Will And The Legal Process

man signing a contract

image source: pexels

Step-by-Step Guide 

The first step in learning how to make a will is to decide how you will create it. You may do it on your own using one of the many software programs available or consult an attorney to draw it up for you. Using a valid software program or legal services are the best routes as drawing it up on your own could result in an invalid document.  


Next, you need to consider who you want to list as the beneficiaries in your will. Your beneficiaries are the individuals who will receive your assets, whether those assets be monetary, physical property, or other types of possessions.


The following important step in how to make a will is to select the individual you want to act as the executor. This is the person who will ensure the requests detailed in your will are followed to the letter. You might select your attorney or bank as the executor which will come at a cost of around 2 to 4 percent of your total assets. If you were to choose one of your close friends or a family member as the executor, they should still receive either hourly compensation or part of your final assets for their services.


If you have minor children, you must select a guardian to take care of them. While you are not legally required to ask the individual before listing him or her as a guardian in your will, it is usually a good idea to do so. Otherwise, select three individuals who you would deem wise, responsible guardians and name them in your preferred order in your will.


lady justice statue

image source: pixabay

Next, you need to consider who you want to list as the beneficiaries in your will. Your beneficiaries are the individuals who will receive your assets, whether those assets be monetary, physical property, or other types of possessions.


The following important step in how to make a will is to select the individual you want to act as the executor. This is the person who will ensure the requests detailed in your will are followed to the letter. You might select your attorney or bank as the executor which will come at a cost of around 2 to 4 percent of your total assets. If you were to choose one of your close friends or a family member as the executor, they should still receive either hourly compensation or part of your final assets for their services.


If you have minor children, you must select a guardian to take care of them. While you are not legally required to ask the individual before listing him or her as a guardian in your will, it is usually a good idea to do so. Otherwise, select three individuals who you would deem wise, responsible guardians and name them in your preferred order in your will.


Another important step to remember in learning how to make a will is to spell everything out clearly. You do not want your will to be unclear or prone to interpretation. List your beneficiaries and their allotment of your estate concretely so there is no confusion later. It can be difficult to make sure that everyone you choose is receiving a portion you feel is fair and just. The ultimate decision is up to you, but you may consult with your heirs, particularly your spouse or children to see what assets have meaning to them and those which do not.


Sometimes, learning how to make a will that is valid and legally binding may not allow you to relay your final thoughts to your designated beneficiaries to your satisfaction. You may also write a letter as an appendix to the will that can be read to your heirs and explain your wishes in full.


Creating A Valid Will 

person hand writing

image source: pixabay

One of the most important aspects of how to make a will that is binding is to have witnesses sign it. Without the signatures of at least two witnesses, your last will and testament will be considered invalid. Much of the time, those witnesses cannot be listed beneficiaries in your will. They must also be no younger than 18 years of age. The witnesses need to watch as you sign your name and date the will, then sign their names afterwards.  

Part of learning how to make a will is to ensure that it is safe and secure until the day it needs to be executed. Once you have completed your will, put it in a secure place known to a trusted few. You want your will to be safe, but you also want it to be easily found by your chosen family members or friends in the event of your passing. You may have several copies of the will, but it is best to keep the original one in a location like a fireproof safe or other secure storage space.

Conclusion

man holding bag while walking

image source: unsplash

Learning how to make a will that is legally binding and carries out your wishes to the letter is not inherently complicated. It requires some careful thought, consideration, and time beforehand. Do not create a will without using valid software programs or seeking the advice of an attorney as this could result in an invalid document.

It is important to remember that your will might need to be updated during the passage of the years. If you get married, divorced, have children, or experience any other similar life-changing events, you will need to update your will with the appropriate beneficiaries. Check your will every 2 or 3 years to see if changes need to be made and make sure everything is up to date.

Sexual Harassment in the Workplace: What Are Your Rights?

However common, sexual harassment in the workplace is an unfortunate and illegal practice. Sexual harassment is classified as sex discrimination and it is expressly prohibited by Title VII of the Civil Rights Act of 1964. If you are experiencing sexual harassment at work, it’s important that you educate yourself on your rights and what actions you can take against it.

Here we will discuss what sexual harassment in the workplace is, examples of sexual harassment, how you are legally protected, and what you can do about it.

What Is Sexual Harassment in the Workplace?

Sexual harassment in the workplace is defined by the US Equal Opportunity Commission (EEOC) as, “Unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature constitutes sexual harassment when submission to or rejection of this conduct explicitly or implicitly affects an individual's employment, unreasonably interferes with an individual's work performance or creates an intimidating, hostile or offensive work environment.”

The takeaway from this definition is that sexual harassment is any unwanted behavior that is sexual in nature. In the workplace, sexual harassment may take the form of directly sexual behaviors like touching. Sexual harassment also includes non-sexual behaviors that negatively generalize a person or group of people based on sex.

Federal law and state law protect employees from sexual harassment in the workplace. Some states have stricter sexual harassment laws. Investigate the laws for your state for more specific state law information on sexual harassment.

Examples of Sexual Harassment

Sexual harassment may come from non-verbal, physical, verbal, or visual behaviors. The following are examples of behaviors that qualify as sexual harassment in the workplace.

Non-Verbal Sexual Harassment

  • Hovering or following around
  • Sexual facial expressions
  • Sexual gestures
  • Staring

Physical Sexual Harassment

  • Assault
  • Blocking movement
  • Grabbing
  • Unwanted hugging
  • Unwanted kissing
  • Unwanted petting
  • Unwanted touching

Verbal Sexual Harassment

  • Requesting sexual acts
  • Sexual innuendos
  • Sexual jokes
  • Sexual threats
  • Unwanted comments about body
  • Unwelcome comments about gender

Visual Sexual Harassment

  • Sexual photos
  • Sexual videos
  • Sexual drawings
  • Sexual emails

Types of Sexual Harassment in the Workplace

Severe or Pervasive Cases

Sexual harassment in the workplace may be severe, pervasive, or both as defined by law.

Severe

Person traumatized and crying while having a black eye

Image by Anemone123 via Pixabay

Severe cases of sexual harassment are solitary incidents of extreme sexual harassment or sexual violence. Most times, courts will not permit sexual harassment cases for single incidents unless it is deemed severe.

Pervasive

Pervasive sexual harassment is ongoing. These incidents may be less severe but still damaging. Prolonged exposure to unwanted sexual behavior can negatively impact an individual and the workplace.

Quid Pro Quo

A quid pro quo sexual harassment incident is a singular event. Typically the quid pro quo sexual harassment comes from an authority figure. The authority figure might use their position of power to sexually harass an employee. In these cases, the employee might fear demotion or job loss.  

Hostile Work Environment

A hostile work environment is continuous or pervasive sexual harassment in the workplace. It is defined as unwanted and unwelcome sexual conduct or discrimination based on sex. Hostile work environments are sometimes severe, abusive, and long-lasting.  

Know Your Rights

Quiet woman covering nose and mouth

Image by Anemone123 via Pixabay

Sexual harassment in the workplace is against the law and you have rights. You have the right to work in an environment free from sexual harassment. Your employer is required to take “reasonable action” against any perpetrator of sexual harassment.

Retaliation

It is illegal for an employer to retaliate against you for filing a sexual harassment report. You, or other people who have witnessed and support your claims, legally cannot receive any punishment from your employer for taking action against sexual harassment.

Employer Responsibility

Both federal law and state law strictly prohibits sexual harassment in the workplace. Most employers with 15 or more employees are required to take action that will ensure employees are not subjected to sexual harassment in the workplace.

If the harasser is a supervisor, the employer is legally liable for the behavior. In order for an employer to be held liable for the harassment made by a co-worker, client, or another party, they must know about the sexual harassment claims. Submitting an official sexual harassment report in writing is sufficient notice of this claim.

File a Civil Lawsuit

If your employer fails to correct the situation and change the work environment, you may file a civil lawsuit against your employer. Read the Actions To Take Against Sexual Harassment section for more information before starting a civil lawsuit.

Potential Legal Remedies

A legal remedy is a court-ordered compensation to a victim for damages inflicted pertaining to the case. In sexual harassment cases, victims may be entitled to receive such compensation as:

  • Back-pay
  • Court costs
  • Compensatory damages (emotional ramifications of sexual harassment)
  • Hiring
  • Payment of legal fees
  • Promotion
  • Punitive damages
  •  Front-pay
  • Reinstatement

Actions to Take against Sexual Harassment

Woman thinking in reflection

Image by Anemone123 via Pixabay

Experiencing sexual harassment in the workplace is traumatic. Everyone deserves a safe workplace free of unwanted and inappropriate behaviors. There are specific actions to take if you are experiencing sexual harassment at work. These procedures cannot guarantee that the situation will change, but they can help you through the process.

Clearly Express Disinterest

Follow Your Company’s Protocol

Thoroughly Document Everything

Keep a Paper Trail

Report Sexual Harassment in Writing

Safeguard Your Notes

File a Complaint with the EEOC

Hire an Attorney

Conclusion

Knowing your rights for sexual harassment in the workplace is a solid first step to bettering your situation. If your employer does not take reasonable action with any expediency, you can move forward with a sexual harassment case.

Sexual harassment cases are among the more difficult cases to prove in a court of law. Meticulously documenting any incidents of sexual harassment and following your company’s protocol will help build your case. After you have taken the right steps against sexual harassment, seek legal counsel to move forward with the civil suit.

The most important thing to know about sexual harassment in the workplace is that it is not acceptable, it is not legal, and you do not have to tolerate it.

Featured Image: Image by Mihai Surdu from Pixabay

Debunking Prenuptial Agreement Stigmas: 10 Reasons They’re a Good Idea

So you’re thinking about getting married? Bringing up the subject of a prenuptial agreement can seem hurtful and unnecessary to a romance-fueled situation. Many believe that the sole purpose of a prenuptial agreement is to ensure the financial stability of the significantly more well-off member of the union, but a prenup is actually so much more than that.

The financial settlement proceedings of a divorce can be incredibly emotionally-charged and financially ruin both spouses. For these reasons, divorce proceedings can get ugly, and sitting down to discuss a prenup beforehand can keep that from happening, if the union ends. This type of agreement can offer protection to both partners even if both partners aren’t considerably well-off.

What Is a Prenuptial Agreement?

couple discussing a contract

Image source: Pexels

A prenup is a legal document that determines how assets will be divided and protected in the event of a divorce. These types of agreements might not be as important to young people getting married for the first time. They are just starting out and haven’t yet built a life for themselves; most of their possessions will be shared assets, so it’s impossible to predetermine how to divide them ahead of time.

But if you’re getting married later in life, you’ll probably have more of your own assets to protect. Consider:  you've worked countless hours at the office, and spent years building a life for yourself. If you end up divorcing, you may be forced to give half of it to someone who wasn’t there to build it with you. And honestly, how is that fair?

The Stigma Surrounding Prenuptial Agreements

person holding scrabble tiles that spell forever

Image source: Unsplash

A failed relationship is a devastating situation, but it can be planned for. Accepting divorce as a thing that sometimes happens and planning ahead for it can make the consequences less severe for both sides in the event of a split.

At the end of the day, the purpose of a prenuptial agreement is communication and to set expectations within the relationship. You’ll want to make sure you’re both happy with how your own property, any shared property, and, if applicable, alimony payments will be separated and dispersed in the event of a divorce. So why do so many people find the idea of a prenuptial agreement so offensive?

Here are some of the reasons there's a stigma surrounding prenuptial agreements:

Presence Of Doubts

Many argue that the existence of a prenuptial agreement reveals that one partner has doubts or may be expecting an impending marriage to fail. Thinking about the end of a marriage during what should be the “good times” in the relationship might give the appearance that one partner isn’t as happy as the other thought. But that simply isn’t always the case.

Apparent Lack Of Trust

Setting boundaries included in a prenup can also come off like the requesting partner doesn’t trust the other when in reality, you may want protection from things you already know about, such as student debt. Or you may wish to protect your partner from your own debt.

It’s Not Very Romantic

Well, this stigma is actually true. Prenuptial agreements are not romantic topics. They require a couple to venture into uncomfortable territory and imagine the end of a marriage that is just starting out; that is depressing. But that doesn’t mean that the relationship itself has no romance or that the agreement keeps future romance away.

Either way, appearances are just that:  appearances; things are not always as they appear. Your partner could just be cautious. And hey-maybe they are protecting you more than themselves. Many marriages have dissolved before making it down the aisle because one partner jumps to conclusions at the very mention of a prenup.

10 Reasons They're A Good Idea

While there are blanket agreements that cover the basics, couples have the option to create their own agreements better-crafted to their specific lives. It provides a way to tailor and design the agreement to meet specific needs, wants and expectations. No two relationships are the same; therefore, no two prenups should be either. So why consider a prenuptial agreement?

1. They Make Sense

Modern-day society is a place of uncertainty, and marriage is no exception. Situations change. People change. And just like everything else, marriages can end.

Signing a prenuptial agreement shows your partner you’re realistic, responsible and forward-thinking. It means that you’re getting married for the right reasons and not for materialistic ones.

2. High Divorce Rate

It’s no secret that divorce rates among couples have been rising for decades and in the modern day, knowing a divorcee is a pretty common occurrence.

In a world where a large percentage of marriages end in divorce, considering a prenuptial agreement before tying the knot isn’t such a bad idea.

3. Protection of Valuable Assets

When you think of assets, you may think of expensive things. But they can also include items of sentimental and familial value.

In the event of a divorce, a partner may want to ensure that any family heirlooms, such as a pair of diamond earrings that have been in the family for generations, will be kept in their possession regardless of how the marriage ends. Items can also include collectible memorabilia or even a family pet you’d never want to part with.

4. Protects The Victim's Spouse

When it comes to any partnership, there is always the threat that one person may decide to leave. One spouse might not even see it coming, and then the next thing they know, they’re hit with a demand to terminate the relationship immediately.

In these cases, the partner who initiates the divorce has had much more time than the other to prepare for what lies ahead. Having a prenuptial agreement in place ensures that the victim has a plan and doesn’t get bushwhacked in rushed divorce proceedings.

5. Protects Your Credit

Going through a divorce can be traumatic in many ways. And on top of the emotional turmoil, it can pretty quickly destroy your finances and even threaten your financial future. Consequences can include damage to your credit, paying for alimony, your spouse’s debt and child support.

scissors cutting marriage certificate in half

Image source: Pexels

6. Debt Protection

While one spouse may bring more money into a marriage and wish to sign a prenup, it’s also possible for the opposite to be true.

A prenuptial agreement can also offer protection if one spouse brings significant debt into the relationship. This is an age of student debt after all, and the last thing anyone wants is to add their ex’s debt to their own.

7. It Forces Transparency

Discussing the different aspects of a prenup with your partner involves delving deep into each other’s financial lives. It forces you to examine aspects like each other's credit score, debt and spending habits.

So while a prenuptial agreement will protect you in the future, it also minimizes surprises that can occur during the marriage itself. For example, if your future wife or husband has high amounts of credit card debt, when he or she turns out to be a spender, you won’t be as surprised as you might have been.

8. Promotes Fairness And Equality

Signing a prenuptial agreement is a relatively simple process, and it is done under less emotional conditions. When terminating a marriage, having a prenup helps the couple reach a fair agreement.

However, if you sign an agreement with a cheating clause and one spouse is found guilty of infidelity, then the non-cheating partner will end up with everything.

9. The Reality of Gold-Digging

While a majority of people do get married for the right reasons, there are people out there who don’t. Gold-diggers are real, and they can be very persuasive and manipulative.

If you have high-valued assets, you are at a much-increased risk for attracting these types of people. Insisting that your partner signs a prenuptial agreement ensures that they are marrying you for the right reasons.

10. Decreases Stressfulness

When you sit down with your partner to sign a prenuptial agreement, what you are essentially setting up are the terms of separation. If you happen to separate in the future, having these terms already laid out can result in less bickering and less frustration over who gets what.

When a couple separates, emotions run high. Having a prenuptial agreement sets up the situation where both sides know what is expected of them.

Conclusion

bride and groom join hands while forming heart shape

Image source: Pexels

So, do you still feel the same way about prenuptial agreements? Would you sign one, or do you wish you had? When people are prepared for potential disaster, they feel less stressed about it. A prenuptial agreement is a preparation tactic that acknowledges sometimes divorces happen. This agreement plans for the worst to keep either party from being devastated by it.

Prenuptial agreements usually come with a stigma, but those stigmas aren’t the reality. More romantic-minded people may feel their partner isn’t sure or isn’t all-in. And that’s completely not true! Wishing to sign a prenup doesn’t mean one partner doesn’t think or want the marriage to work out. It only means that they want to keep the potential for a difficult situation as pain-free as possible.

Types Of Compensatory Damages

If you've been injured or suffered a loss that is the fault of someone else, whether to file a civil lawsuit or not is a big decision. Obviously, consulting with an attorney is something you should give priority. But, before taking that step, you'll want to do a little research and learn the basics of lawsuits. One of the first things to learn is the different types of damages, usually in the form of money awarded in civil cases.

Compensatory and punitive damages are the two basic types of awards you could seek in a civil lawsuit. While punitive damages may be more exciting in a made-for-TV way, this article will concentrate entirely on compensatory damages. By knowing what they are, you'll have a better understanding of what to expect from a potential lawsuit and be able to talk with your attorney more intelligently.

What Are Compensatory Damages?

thousands of dollars to be used as payment for the compensatory damages

Image Source: Pixabay.com

The definition of compensatory damages is an award of money in compensation for actual economic loss, property damage, or injury. Again, compensatory damages are separate from punitive damages in a civil lawsuit. Compensatory damages are broken down further into the following two categories.

Special (or Actual) Damages

This is an award designed to reimburse the injured party for expenses related to property damages, medical costs, and loss of income. The award will be in the amount of actual losses. For example, a car totaled in an accident would be valued at its retail price minus any depreciation. This award is designed to replace real losses to return the injured party to the financial condition they were in before the loss took place.

General Damages

These may be awarded for personal harm suffered by the injured party including pain and suffering, mental anguish, loss of consortium, and lost opportunity for the future enjoyment of life. Due to the often difficult circumstances involved in these awards, the court will use outcomes of similar prior cases to determine amounts awarded.

Types of Compensatory Damages 

an ambulance who's services can be included in compensatory damages

Image Source: Unsplash.com

Now that we've defined the major types of compensatory damages, we'll break down the specifics of each condition in which they may be applied.

Medical Expenses

When you are injured, you could be left with some costly medical bills. As part of a civil lawsuit, your medical expenses could be a large percentage of the damages to which you're entitled. The greater the amount of money owed for medical services, the greater the amount of damages the lawsuit will pursue.

There could be damages after initial treatment, in the form of long-term care, to be factored in. Examples of medical expenses include:

  • Ambulance services
  • Emergency room and hospital care
  • Physician care
  • Diagnostic testing
  • Physical rehabilitation
  • Occupational rehabilitation
  • Home care

As you can see, the list of potential medical expenses is long. Medical bills can be presented as evidence of initial care costs while your attorney can find experts to assist in determining potential long-term care needs.

Property Damage

The injured party may also seek compensation for the repair or replacement of any property damaged in an accident. In an automobile accident, for example, not only is damage to the car recoverable, but lost or damaged property inside the car (tools, golf clubs, child seat, etc.) may also be eligible for compensation. Cost of a rental car or other alternate means of transportation may also be eligible while repairs are being completed.

Valuing damaged property may require an appraiser, whose job it is to determine the extent of the property damage. If the property is not salvageable, the victim can seek compensation in the amount of its value before the accident. If repairs can be made, the loss of use by the injured party, besides the repair itself, becomes part of the total damages.

Another factor in total costs could be interest and loss of profit. For example, if the injured party loses business equipment or tools used in their employment, these are damages that could be added to a lawsuit.

Loss of Income 

an injured party who can be awarded compensatory damages due to loss of income

Image Source: Pixabay.com

If there is an injury, and it prevents the injured party from working or running their business, damages may apply in the amount normally earned during the recovery period. This is known as lost wages. Time missed from work due to a doctor's appointments, physical or occupational therapy or other related treatments of the injury would also be considered as lost wages.  

A permanent injury that prevents the injured party from working for the rest of their life may also be eligible for compensation to cover the loss of future earnings. Finally, if a person dies due to an accident, the deceased party's family can bring a civil lawsuit for the lost income that the victim would have earned based on their age and current salary.

A younger person has a longer work-life expectancy and would suffer a substantial loss of future earnings in the event of untimely death compared to an older person.

Pain and Suffering 

The amount of pain and suffering an injured party goes through is difficult to assess. Everyone's pain threshold is different, but there are ways to measure and document the injured party’s level of suffering.

Information can be collected from medical records and providers concerning the amount of medication the injured party required, the kinds and duration of treatments needed, and the expected length of the recovery period. Family members and friends of the injured party can be interviewed to find out if the accident caused any effect on the victim’s quality or enjoyment of life.

Pain and Mental Anguish and Emotional Distress Suffering 

an injured party experiencing mental anguish and emotional distress who can be compensated for damages

Image Source: Pixabay.com

Different from pain and suffering, the effects of these mental conditions include terror, shock, apprehension, confusion, humiliation, and sorrow. Some states make it difficult to prove with strict guidelines such as the “zone of danger” test which considers how physically close the injured party was to the accident.

Another limit is the “physical manifestation rule” which requires that the emotional distress experienced by the injured party be exhibited by physical conditions such as depression and anxiety intense enough to cause ulcers or loss of appetite and weight. Proving these conditions is difficult and requires expert guidance.

Loss of Consortium 

This is another type of compensatory damages available in the case of a permanently disabling injury. Loss of consortium is the inability of the injured party to engage in acts of companionship with their spouse or loved one at the level they once did. Damages awarded tend to be less but can still be significant in a case involving a permanent outcome such as paraplegia.

Lost Opportunity 

These compensatory damages are sometimes recoverable in addition to lost wages and loss of future earnings. They refer to a business opportunity of the injured party that has been impeded due to an accident. A claim of this type must be supported entirely. Failure to do so could damage the merits of the entire case and cause a judge or jury to reject other damages sought by the injured party.

When Are Compensatory Damages Awarded? 

Compensatory damages are awarded in civil court cases where the injured party's loss has occurred as a result of the negligence or unlawful conduct of another party. For compensatory damages to be awarded, a judge or jury must be able to determine the actual monetary value of the loss suffered by the injured party. Some examples include:

  • Automobile accidents
  • Work-related injuries
  • Medical malpractice
  • Municipal infrastructure failures
  • Institutional neglect of safety issues
  • Business or corporate negligence
  • Certain criminal offenses

Examples of Lawsuits Involving Compensatory Damages

a team of surgeon undergoing surgery

Image Source: Pixabay.com

Here are a few examples of real-life lawsuits that resulted in compensatory damages being awarded:

1. $80 Million Verdict Reached in Medical Malpractice Suit

A defective medical stapler almost cost a retired police officer her life. She went into the hospital for routine hemorrhoid surgery, but the surgeon used a defective stapler. The damage caused her bowels to rupture. She went into sepsis and shock. She eventually recovered, then took the stapler manufacturers to court and netted a verdict of $80 million.

2. Lawsuit Over Toxic Water  

An Ohio woman successfully sued a Teflon company after her attorney proved that they knew that their products contaminated local water. She was awarded $1.6 million in damages, and her case was followed by more than 3,000 others claiming that their water was affected too.

3. Fast-Food Hot Coffee Lawsuit 

A jury awarded a woman $200,000 in compensatory damages to pay for medical bills and other related expenses due to being burned by a cup of hot coffee purchased through the drive-in window at a fast-food chain. Because the company had prior knowledge that their coffee could cause serious injury, yet did nothing to remedy the situation, the jury also awarded the woman over $2 million in punitive damages.

Conclusion 

As you can see, there's a lot to learn about the world of civil litigation. Seeking the guidance of an experienced personal injury attorney should be one of the first things you do in case of an injury or loss that's the fault of another. It's also helpful to educate yourself to be of help to your attorney and to know you're getting sound legal advice.

Knowing the ins and outs of topics like compensatory damages will only help you be a better plaintiff. Your legal team will appreciate it, and it will increase your chances of achieving the outcome you desire. Arming yourself with a basic knowledge of your rights under the law is the first step to a successful civil lawsuit.

Featured Image Source: Pixabay.com


Facing Foreclosure? 4 Things You Need To Know

The foreclosure process isn't something any homeowner wants to go through. It’s upsetting and can add more problems on top of the issues causing you to default on your mortgage. According to the Mortgage Bankers Association, about 250,000 families face this problem every few months. The process is started by the lender when you default on your monthly mortgage payment.

Your lender won't always try to take away your home, though. If you are able to come up with the money owed or come to a specific agreement with your lender, this can resolve the problem. By communicating with your lender, understanding your rights, and talking to a real estate attorney, you can better understand the process. Before you can look at potential solutions, however, you first need to understand the foreclosure process.

What Is A Foreclosure?

A foreclosure is a legal process that allows a lender to take back ownership of a property from the current homeowner. This typically occurs when the person who borrowed money to purchase the property can no longer make the monthly mortgage payment or are consistently late with their payments. While foreclosure often results in the lender taking ownership of the property or selling it, there are options to avoid losing the home or lessening the damage done to your credit. For example, you can have a short sale or ask for a mortgage release.

If the property is repossessed, the lender can sell the home through a real estate agent or public auction to recoup the money lost. If a public auction is held and there are no bids, the lender becomes the new owner.

Understanding Your Options  

It’s important to understand all of your options legally when you get a foreclosure notice. Talking to your lender immediately is necessary to avoid foreclosure or avoid a heavy hit on your credit. If foreclosure is unavoidable, make sure you are following the procedures correctly to eliminate additional problems.

If you do end up dealing with foreclosure, you're likely to go through the following steps:

1. Default On Mortgage

The first step in the process is when you default on making mortgage payments to your lender. The current owner must default, and this doesn’t usually happen right away. It may take several late mortgage payments or no payment for the bank to start the process.

Typically, a bank will give the homeowner time to catch up on payments because they understand the reality people face. Hardship can happen to anyone, and there is usually a grace period for the borrower. The bank is likely to send you many emails, phone calls, and letters letting you know you owe money.

Banks or lenders also typically offer different payment options to the current homeowner to get back on track and stay in their home. It is in the best interest of both parties that payments are made. The bank wants their money, and the homeowner wants to remain in their home. The bank isn’t interested in kicking people out of their homes; they are in the business of lending money to make money.

Usually, a lender cannot file a notice of default until a month after contacting the homeowner to discuss the present financial situation. This gives the owner time to figure out a plan. Sometimes selling the home before getting a notice is an option. If you are able to do this, you can pay off what is owed and find a smaller or cheaper home. This is great for homeowners who already have a lot of equity in the home and may be your best option. If it's not, seek guidance from a financial advisor, HUD, or an REO realtor in your area.

Reasons for Default

There are a number of reasons why someone might default on their mortgage:

  • Unemployment
  • Credit Card Debt
  • Medical expenses
  • Relocation sudden
  • Excessive debt
  • Divorce
  • Legal problems
  • Loans
  • Can’t sell the home

2. Notice of Default

gate with padlock

Image by pixabay

When the homeowner or borrower cannot come up with the money, the bank or lender will send a notice of default in the mail. The letter usually comes as a certified letter and gives the homeowner 90 days to pay the most recent payment. This is the first formal attempt in the process of foreclosure. Once received, the homeowner should make plans to pay off the debt so the process doesn’t proceed.  If you are able to catch up on payments, you can have your mortgage reinstated.

3. A Notice Of Sale

house for sale

Image by pixa​​bay

After the certified letter comes and you cannot come up with the funds to get current on your mortgage, the default process continues. The third step is known as a notice of sale. You will be notified that the home will be sold by the lender at a home auction within 21 days.  This will come as another certified letter in the mail.

The notice of sale will also be published in a weekly newspaper for three weeks. This helps allow potential buyers to learn of the sale. Even though this process is going on, the owner has the option to still pay back what is owed and can reinstate their mortgage. They have until five days before the home goes to auction to do so. This is why the process takes time. Don't panic if you receive a notice of sale. You're not being kicked out of your home just yet.

4. Property Is Auctioned

During the auction part of the process, the home is sold to the highest bidder. The new buyer must pay the full amount immediately. This new buyer will get the lender’s deed after the completed sale of the property. They then become the new official property owner. Once this is finalized, the new owner has to serve the old owner or occupant of the property a quit or move out notice. Sometimes this doesn’t work, and the new owner must to go through the eviction process with the courts to get the individual or family out of the home.

What Happens If The Home Doesn’t Sell At Auction?

If your home doesn’t sell at auction, the property becomes a real-estate owned property. This is also referred to as an REO property. However, just because it doesn’t sell doesn’t mean you and your family can remain living in the home. When the bank owns the foreclosure, they have every right to evict you from the property. Sometimes they will offer the previous owner relocation assistance. Even if they don't, the current resident or previous owner can ask for assistance in relocating.

Making The Process Easier

file of papers

Image by pixabay

If you defaulted on your mortgage and get a foreclosure notice in the mail, be sure to have all your financial information gathered. Have your basic loan and financial information on hand when you call your mortgage company. This includes your mortgage statements and information about any other debt such as student loans, car loans, and credit card debt as well as all income and tax information.

You should be ready to explain the current situation you’re in, the hardship, and why you are having trouble making your mortgage payments. Be honest and upfront with the lender so you can work towards finding a solution. You may also want to find out if you’re eligible for a mortgage release or short sale.

Remedy The Situation

Once you've talked to your lender, it's time to look at solving your financial problems. If possible, you should look for ways to make enough extra money to catch up on your mortgage. There are some options here. You could pick up a second job or, if you're married and only one of you works, the other person could get a short-term job.

If you have children, having an additional job can be taxing. However, getting a part-time job from home can help relive debt issues. Getting another job might be too much depending on your circumstances, but with a job that allows you to work remotely, you may be able to earn additional money and make up your payments. These kind of jobs are prolific today. Any hobbies you might have could also make you money on the side that would be less taxing.  

Another option to consider is a consolidation loan. These loans can merge some of your other debt, including credit card debt, into one single loan. Often, these loans have a lower interest rate than some or all of the combined debt. That means your consolidation loan payment is likely to be less than the total monthly payments you were making to the individual lenders.

There are a variety of life issues that cause a homeowner to face foreclosure, but there are options out there. Work with your lender and be open to the various solutions they present.

Conclusion

A foreclosure can be detrimental to you and your family. It can ruin your credit and impact the way you live for several years. Acting early can minimize the damage, though. When this process occurs, it's vital that you understand that you do have options. By learning about the process and understanding what your rights are, you'll be able to make informed decisions regarding your mortgage.

Regardless of your circumstances, you want to act as soon as possible and find a plan that works for you.

How To Choose The Right Divorce Lawyer

A divorce is a process of terminating a marital union. Divorces are emotionally draining, and if your partner wants a part of your wealth or children are involved, it is even more stressful. Finding the right divorce lawyers to help you with the divorce may be difficult since not all lawyers specialize in this area. It is important that you find someone who is experienced in handling such matters and knows everything about the divorce process. This maximizes your chances of a beneficial outcome for yourself.

It is important to identify the right attorney as this saves you a lot of money and time. Court proceedings will be faster and potentially less expensive. You’ll avoid the extreme stress associated with the divorce process, which is typically long and drains you financially and emotionally. If you don’t know how to look for the right divorce lawyers, you will find this article beneficial. It highlights who divorce lawyers are, why you need them and tips on how to choose the right one.

Is There A Need For Divorce Lawyers?

hand signing

Image from Pexels

You need a divorce lawyer to help in the dissolution of the marital relationship. This typically entails several issues, including custody of children and division of property. You should ensure that you work with a divorce attorney who you feel comfortable with on a personal level so that you can discuss all aspects related to the divorce without worrying about having to expose personal information. Divorce is emotionally draining, which is why it requires delicate skills in dealing with people who are divorcing and the legal know-how. You need to hire divorce lawyers because of:

Experience

A qualified divorce attorney has experience in family law that you might not have. While you may have a little legal knowledge, there is no reason to handle your divorce. Finding a divorce attorney will not only provide you with the much-needed experience. If you choose to handle your divorce, you’d probably make a crucial error if you are not familiar with the paperwork involved or the court proceedings.

Unilateral Decision

Most divorce cases entail a unilateral decision. One party is typically for the divorce while the other opposes it. This can be emotionally draining as it will accompany disputes outside of court, which complicates case issues further. Therefore, if you want the divorce proceedings to be handled with the required expertise and finesse, hiring divorce lawyers is your best bet.

Avoid Mistakes

The legal system of divorce proceedings is complicated. Besides, the divorce is stressful, which makes it even harder for you to think clearly. When you don’t have a clear mind, there is a high likelihood you’ll make mistakes. When you hire an experienced divorce lawyer, you’ll be covered as he or she will circumvent any potential error you’d probably make.

Reducing Emotional Stress

Going through a divorce is emotionally draining. You need a divorce lawyer, who is knowledgeable and organized to take care of any legal issues that arise in the entire divorce lawsuit and address concerns and needs you may have. This eases some emotional stress, making it easier for you to go through the divorce process, including all the court proceedings.

Objective Opinions And Advice

One advantage of hiring a divorce attorney is that he or she will provide objective advice and opinions. This is because they can view the case from a different angle as they are neither invested emotionally in the case nor affected by it. They will guide you in the trickiest parts of the divorce.

Paperwork

Divorce entails a lot of paperwork. Sometimes, what needs to be filled is not simple. Without the help of experienced divorce lawyers, you might not even know where to start. When you hire an attorney, you are certain that all the complex issues of the divorce will be taken care of.  

Provide Information On How To Choose The Right Divorce Lawyers

man signing paper

Photo by rawpixel.com from Pexels

We have compiled a list of tips to help you choose the right divorce lawyers. These include:

Decide On The Preferred Divorce Process

This is the first decision you’ll have to make. You should decide whether you want to use litigation, mediation, collaborative divorce or any other divorce process at your disposal. After that, you will match the divorce process you want with the right attorney. If you want the divorce to be settled amicably, don’t hire shark attorneys who will probably escalate the divorce conflict. 

Make A Decision On The Legal Services You Need

Each divorce is unique, and therefore, you will need legal advice, but you don’t have to pay a $400 per hour for divorce attorneys. However, if you own big companies or assets, or in a complicated financial situation, you might need one, even when the fees are exorbitant. If you have a short marriage, no real estate or kids, and you’re not dividing any retirement plans, hiring big law firms is an overkill. In that case, look for someone who isn’t exorbitant.

What Can You Afford?

You need to consider what you can afford as no one wants to pay thousands of dollars to a divorce lawyer. You have to balance the legal fees. Don’t go for someone who will charge unreasonably, but someone who is affordable but can perfectly deal with your divorce situation.

Be Realistic

Divorce is a legal process meant for resolving custody issues and dissolving your assets. The attorney’s job is to represent you. Even though you might want him or her to listen to your sadness, pain, anger or frustration, you should be realistic since they are not trained as therapists. If you need therapy, you should visit a therapist, otherwise don't overburden the lawyer on matters he or she can't help.

Stay Focussed On The Goal

You want to file for divorce and avoid lifestyle depreciation. This should be your goal, so don’t let emotions get the better of you and get rampant in property negotiations as this should not be in the bigger picture. Otherwise, your divorce will take a longer, more expensive and more litigious.

What Do You Want?

You should know what you want before seeking the services of divorce lawyers. Therefore, before proceeding to the attorney, consider other alternatives, such as traditional litigation. If the divorce does not involve children or finances, it might be better if you hired a mediator to negotiate the divorce terms. Mediation is faster and cheaper. So if you decide to go to divorce lawyers, ensure this is the last resort or the necessary choice.

Identify And Interview At Least Three Potential Attorneys

You should take time to research the attorney. The internet might be of help here. Once you settle on the three most preferred lawyers, you can now interview them to find out their area of practice and whether they will be helpful in your divorce. You might also want to consider their legal fees. Go for the lawyer who seems to be the best negotiator.

Look For Red Flags

Many attorneys will tell you what you want to hear so they can close the deal. If they make promises, don’t believe it. If in the interview process or discussing your case, the lawyer divulges confidential information from other cases or if they aren’t respectful; you need to find another lawyer who has positive traits. Also, consider a lawyer who is not constantly distracted by emails and phone calls.

Choose The Attorney

The divorce lawyer you go for should be knowledgeable, local, professional, responsive, and a good communicator. It is someone you feel comfortable with and trust. The attorney should also be affordable.

Conclusion

hammer books law

Image by succo from Pixabay

Just like any profession, there are good attorneys and bad ones. You should be careful when choosing an attorney, but it is up to you to do your homework and ask the right questions so you settle for the best divorce lawyer. The best divorce attorneys will listen to your concerns, ask queries about what you want to achieve, and provide honest assessments of your divorce so that you achieve your divorce goals. The lawyer should be knowledgeable, local, professional, responsive, great communicators and trustworthy. We hope this article has adequately addressed what divorce lawyers are, why they are important and tips on how to choose the right one.

Rules of Married Filing Separately

Image from Pixabay

When you are married, you have the choice of filing your taxes jointly or separately. What are the benefits? Here we discuss the option of married filing separately on your tax returns.

What Is Married Filing Separately on Taxes?

married filing separately on taxes

Image from Pixabay

Married couples that file their taxes together, also called filing jointly, file with the same return. They take joint responsibility for the information on the return and the amount of taxes that are owed to the government. When you are married and file separately, each person in the couple can have a separate responsibility for the taxes owed. Filing separately while you are married can disqualify you from a large number of tax breaks. However, there are some situations that would warrant married filing separately (MFS) versus married filing jointly (MFJ).

Is There a Need to File Separately if You Are Married?

Here we will discuss situations that could create benefits for a person that is married filing separately.

You Need to Separate Your Tax Liability

There may be a need to separate your tax liability from that of your spouse. If you sign a joint return, both people are responsible for whether the information on the return is correct. If penalties or additional taxes are owed, both people are responsible. If you think your spouse is less than truthful about income or deductions, you may want to separate your tax liability. If you are audited by the Internal Revenue Service when you file separately, you are only responsible for paying what you owe on your earnings. In a situation where your spouse’s income is significantly higher than your own, it may be especially advantageous to submit your tax returns as married filing separately.

One Spouse Has Substantial Itemized Deductions

If both spouses have taxable income and at least one person, usually the spouse with lower income, has substantial itemized deductions that are limited by adjusted gross income, it may be helpful to submit a married filing jointly return. Itemized deductions can be limited by your adjusted gross income. Some of these deductions include:

  • Charitable deductions – deductible up to 20%, 30%, or 50% of adjusted gross income, depending upon type of gift
  • Medical expenses for those under age 65 – deductible if they are greater than 10% of adjusted gross income
  • Medical expenses for those age 65 or older – deductible if they are greater than 7.5% of adjusted gross income
  • Miscellaneous expenses, including tax preparation costs, investment expenses, and unreimbursed business expenses – deductible if they are greater than 2% of adjusted gross income
  • Personal casualty losses – deductible if they are greater than 10% of adjusted gross income

Here’s an example of a situation where one spouse has substantial itemized deductions. A couple has a large quantity of unreimbursed healthcare costs. The spouse with the most medical expenses can calculate the deductibility against his or her lower adjusted gross income. When filing separately, the allowable deductions could be higher than if the couple submitted their return as married filing jointly. Therefore, the couple submitting a married filing separately return could reduce the amount of tax liability.

Other Considerations for Married Filing Separately

tax filing

Image from Pixabay

Your state income taxes are another factor to consider if you want to submit tax returns as married filed separately. Calculating federal and state taxes owed may influence your decision to file separately. Here are some other considerations.

Community Property States

In community property states, marital property is owned by spouses equally. Marital property includes earnings, property purchased with earnings, and debts gained during the marriage. For example, if your spouse earned $60,000, half of that would be reported as your income even if you did not work outside the home. In general, assets owned by each individual before the marriage and after the couple physically separates are considered that individual’s property.

Community property states require different rules for distributing income and deductions when filing separately. Community property states include Arizona, California, Idaho, Louisiana, New Mexico, Nevada, Texas, Washington, and Wisconsin (as of 2018). Even if only one spouse lives in a community property state, community property deductions must be split in half, with each spouse reporting half of the deduction on each return.

Other Reasons for Filing Separately

Some spouses may prefer to keep their finances separate. If the taxes owed when submitting a return as married filing separately are the same or very similar than if you file jointly, you may choose to file separately.

If you or your spouse has income-based student loan payments, you may want to file to keep the payments based on only the student’s income and not the combined income of the couple. If you or your spouse owes unpaid taxes and the Internal Revenue Service may take a refund to offset the balance due, you may want to file separately. If both you and your spouse earn a high income, it may be advantageous to file separately.

There may be non-financial reasons a couple would want to submit a married filing separately return. One member of the couple may not be able to consent to filing a joint return. One member of the couple may be unwilling to consent to filing a joint return. The married couple may be separated, but not yet divorced, and wish to keep their tax returns separate. The couple may live separately and one spouse qualifies as the head of household.

Head of Household Status

A legally married person may be considered unmarried by the IRS. If that is the case, that person may choose to file as head of household rather than married filing separately. Certain criteria must be met to submit returns as a head of household filing status. One of these criteria is that the spouses did not live together for the last six months of the year. Another criterion is that a child or other dependent must have had their primary residence with you for more than half of the year.

As head of household, you must have had to pay for more than half the cost of maintaining the household. If you are eligible to file as a head of household, there are certain tax deductions and credits that are available to you because of your status. However, determining status as head of household can be tricky. Consult your tax professional or the IRS What Is My Filing Status tool for more information.

Tax Rates of Married Filing Separately

tax rates

Image from Pixabay

Here are the federal tax rates in 2018 for those who are married filing separately, according to Forbes magazine.

If Taxable Income Is

Then Tax Due Is

$0 – $9,525

10% of taxable income

$9,526 – $38,700

$952.50 + 12% of the amount over $9,525

$38,701 – $82,500

$4,453.50 + 22% of the amount over $38,700

$82,501 – $157,500

$14,089.50 + 24% of the amount over $82,500

$157,501 – $200,00

$32,089.50 + 32% of the amount over $157,500

$200,001 – $300,000

$45,689.50 + 35% of the amount over $200,000

$300,000 and above

$80,689.50 + 37% of the amount over $300,000

Amending Your Return

If you change your mind about whether to submit your tax return as married filing separately or married filing jointly, you can file an amended return. However, some restrictions apply to filing an amendment, also known as a Form 1040X. If a couple files separately, they have 3 years from the due date of the original return (not counting extensions) to switch to a single return. However, if the couple files jointly, they only have until the April 15th deadline of that tax year to change their mind.

Cons of Married Filing Separately

There are negative impacts of the married filing separately status. One is that the two filers must both itemize or both claim the standard deductions. One filer cannot itemize while the other claims the standard deduction if they submit their taxes as married filing separately. In addition, those who submit taxes as married filing separately are unable to claim a number of tax breaks. These include the following:

  • Adoption Tax Credit
  • American Opportunity or Lifetime Learning Educational Credits
  • Child and Dependent Care Expenses
  • Credit for the Elderly and Disabled
  • Earned Income Credit
  • IRA contributions (under certain circumstances)
  • Passive real estate loss (under certain circumstances)
  • Student loan interest deduction
  • Tax-free exclusion of Social Security benefits
  • Tax-free exclusion of U.S. bond interest
  • Tuition and fees deduction (currently available through tax year 2017, but this may change in the future)

Some other tax breaks are significantly reduced. The following will be half of the amount as the deduction on a joint return.

  • Alternative standard deduction
  • Capital loss deduction
  • Child tax credit
  • Standard deduction
  • Saver’s credit

Conclusion

You should always do your research before filing your tax return. Crunch the numbers and see whether submitting your return as married filing separately, married filing jointly, or filing as head of household is the best for you. There are some circumstances where married filing separately, as discussed here, is the best choice. Consult your tax professional for up-to-date advice. You can also consult the IRS website for tools such as the What is My Filing Status interactive tax assistant for more information.

8 Things You Should Know About A Partnership Agreement

When two or more people start a business, they need to agree on how the business will be conducted. This will help the partners to prevent any future disagreements, and if any emerge, there should be a detailed legal mechanism on how to resolve them. There are so many things that partners should agree on including how much partners will contribute to the formation of the business, how they will be salaried, and what duties each partner is responsible for. These aspects should clearly be delineated in a partnership agreement.

So what is a partnership agreement? This article highlights what this agreement is, its importance, and things to consider when drafting it.

What Is A Partnership Agreement?

two person hand shake

Image by rawpixel from Pixabay

A partnership is a business with two or more people, with each owning part of the business. The partnership agreement sets out all the terms and conditions that the parties agree to when forming a partnership. In fact, the partnership agreement is the most important document for a partnership. If a partnership begins without an agreement, it can be jeopardized if something happens to one or more of the partners.

In the partnership agreement document, every possible contingency is included, such as profit sharing ratios and the duties and responsibilities of each partner among other aspects. In the partnership, each partner should buy in or invest in the partnership and they typically share the profits and losses based on the percentage share of ownership.  

Why Involve An Attorney

The partnership agreement is a binding contract. Since it is a legal document, this implies that it is best to have an attorney guide you and provide the much-needed advice when including terms and clauses in the agreement. This way, it will provide adequate guidelines on all business aspects that need to be covered in the contract.

Is There A Need For A Partnership Agreement?

man and woman shaking hands

Image by rawpixel from Pixabay

Running a business on a handshake is not the smartest idea since there may be disagreements, which may prove difficult to resolve if there are no clear set guidelines. Having a partnership agreement gives you and your partners the protection you might need just in case something happens that may endanger the business relationship. It answers the “what if” questions so you don’t have to deal with them when a crisis strikes. For instance, if a partner decides to leave the agreement, it has clearly set guidelines on what should happen.

A partnership agreement is vital as it includes and guides partners in all the following aspects:

  1. 1
    Name of the partnership. There are various types of partnerships, such as LLCs and joint ventures, and the name should be specified in the partnership agreement.
  2. 2
    The term of the partnership. Partnerships can be perpetual or span a specific term length.
  3. 3
    Name the partnership is doing business as (if different). For instance, if the business is under different names or offers different types of services.
  4. 4
    Purpose of the partnership. This entails specifying the activities that the business engages in. This includes the products and services sold and how new services or products will be added.
  5. 5
    The requirements of admitting new partners, including their contributions.
  6. 6
    Types of partners in the partnership. Some of the partners may have more day-to-day duties, such as the general partners, while others may just contribute and have limited participation.
  7. 7
    Types of partners in the partnership. Some of the partners may have more day-to-day duties, such as the general partners, while others may just contribute and have limited participation.
  8. 8
    Each partner’s contribution. This should be specified so that when profits are made, the partners can share according to the amount they contributed. Contributions could be in cash, installments, property, or service.
  9. 9
    The agreement should specify what happens in the event that a partner fails to make the initial contribution.
  10. 10
    It should also clarify whether there will be additional future contributions when the contributions will be accepted, and how they will affect the shares for each partner.
  11. 11
    How profits and losses made through the proceeds of the business will be shared or distributed among the partners, in terms of percentages (percentages, unequal, equal).
  12. 12
    How decisions for the business will be made.
  13. 13
    Duties and responsibilities. Each partner should have an assigned duty and management power, including the skills contributed and the hours for work for each partner.
  14. 14
    Draws to partners. When and how partners should take a draw from the partnership share.
  15. 15
    Financial matters, such as how periodic financial statements and books will be kept and when taxes will be filed.
  16. 16
    The power to be vested in partners to borrow money on behalf of the partnership. How the power is distributed and whether a vote is required to borrow a certain amount.
  17. 17
    Maintenance of records. This entails how and where the records will be kept.
  18. 18
    Meetings. The agreement should clarify when meetings will be held and how many partners will constitute a quorum for meetings.
  19. 19
    The agreement should specify the power of authorizing expenses and the signatures needed.
  20. 20
    The partner time off, including vacations, leaves of absence, and sick leaves should be clearly specified.
  21. 21
    Ownership of assets. The agreement should specify if the partnership owns all assets or whether some are held by the partners.
  22. 22
    Outside activities (those that are restricted and permitted), and the conflict of interest policy.
  23. 23
    Sale or the transfer of a partner’s interest to another partnership, at retirement or another event. It should specify aspects like buy-sell agreements for the partners and the methods involved.
  24. 24
    Non-competition clause. This restricts partners who leave the partnership from competing with the business, within a defined time period and area.
  25. 25
    Continuity of partnership business when a partner dies, leaves, or is terminated as in the case of a buy-sell agreement.
  26. 26
    Expulsion of a partner from the partnership.
  27. 27
    Amendments to the partnership agreement, how and when.
  28. 28
    Severability if a part of the agreement is found to be invalid and doesn’t affect the contract.
  29. 29
    Adherence to state law. This is mainly for the purpose of litigation and establishing the state in which the litigation will be held.
  30. 30
    Mediation and arbitration of the dispute, including mandatory arbitration, if the partners agree to it.

Provide Information On Things You Should Know About A Partnership Agreement

man writing with yellow pen

Image by StartupStockPhotos from Pixabay

We compiled 8 vital things you should know about the agreement, which are:

1. Ownership.

This highlights what to do if something happens regarding the ownership. If you sell the business, the agreement should specify which partner will get what and the partnership’s position of including new partners. Here, the agreement states whether there is the option of buying out another partner. Therefore, the agreement should explicitly describe how ownership interests should be handled in different scenarios, including in the event that a partner retires, dies, or in case of bankruptcy. Include a non-compete clause to prevent a partner from competing with the business once he or she leaves.

2. Critical Developments

The agreement should cover for unexpected occurrences, such as when a partner gets sick or is dying. It also covers what will happen in case of a buyout. It should set retirement provisions and circumstances in which you can change the partnership.

3. Dispute Resolution

While no one wants to think about this, things could get ugly between partners, which is why you should consider this in the agreement. There should be a mediation and resolution process if disputes arise as it might save partners from lawsuits.

4. Dissolution Or Exit Strategy

The agreement should show the events that could trigger dissolution and how the affairs that would be affected would be wound up. This includes all legal means of ending the partnership. This is a security if you or your partners can’t agree on the future of the business. You also need to know the state requirements of dissolving the partnership.

5. Decision Making

This is a safeguard since you won’t be agreeing on everything. Therefore, define how daily management and long-term decisions will be made. Define who gets the last say and the type of decisions that require unanimous votes by the partners, and what decisions can be made by a single partner.

6. Contributions

The agreement should clarify what each partner must stake in the formation of the partnership, and the ongoing finances of the business. It should specify how much each partner should contribute to the commencement of the business. Besides, it should state the responsibilities of each partner in the future needs of the business, including equipment, customers, effort, and time.

7. Partner Roles In Signing And Authorizations

There should be a clear understanding of what the offices or managers of the business are authorized to do on behalf of the business.

8. Distributions

The partnership agreement should detail how partners will share profits, how much each partner will be paid. The agreement should also include the salary for each partner.

Conclusion

hand shake monitor

Image by Nappiness from Pixabay

Every partnership should have an agreement to make sure that every potential situation is covered for. The partnership agreement is a binding contract, which implies that you need an attorney to guide you to draft it, and also help resolve any future disputes or issues. In most instances, it should stipulate that what matters partners should vote for, their contributions, distributions, what should be implemented, ownership, critical developments, dispute resolution, dissolution or exit strategy, and partner roles in signing and authorizations among other aspects.

However, periodic reviews and additions are paramount and keep up to date with legal requirements. We hope this article has adequately addressed what a partnership agreement is, why it is important, and things to consider when drafting one.