by Bill Miller | Aug 7, 2018 | Business
A few years ago, Marty and his partners opened a business: The Choccolocco Metal Fencing Company. They chose to form as a limited liability company or LLC. Now, as their business has grown, they wonder if another business entity would better suit their needs. They begin to explore the idea of converting their Alabama business from an LCC to a corporation.
Deciding Factors
The limited liability company structure has become one of the most popular business entity types in the country. Corporations, however, have a long history and, for some, offer the best structure. Let’s compare LLCs to Corporations in a few key categories:
- Formation. To form an LLC, one or more owners (called members) file articles of organization and usually prepare some type of operating agreement. Corporations also file formation documents with the state in which they are located. Shares are issued to shareholders and a board of directors is appointed to manage the corporation.
- Liability. LLC owners have some protection from liability, while avoiding the double taxation of the corporate structure. Corporations also provide liability protection to their owners – the shareholders.
- Taxes. LLCs are pass-through businesses. Income ‘passes through’ to the owners, who declare it on their personal tax return. Corporations, as separate entities, are taxed on their profits. Shareholders will also pay tax on any dividends they receive.
An LLC can convert to another business entity type, including corporate.
Steps to Take
According to Alabama law, all of the members of an LLC must approve of the terms and conditions of the conversion. Then, the LLC can do the following to convert:
- Get a name reservation certificate for the new LLC from the Secretary of State.
- File a certificate of formation, a statement of conversion, along with the name reservation certificate, with the Secretary of State’s office.
Please note that it is not necessary or recommended to terminate your LLC prior to converting it.
Once the corporation is formed, the owners have a few more things to do:
- Prepare corporate bylaws,
- Elect officers and directors,
- Hold your initial meeting of the Board of Directors,
- Issue stock certificates,
- Change documentation to reflect the new name,
- Decide whether to file an S corporation election with the IRS, and
- Plan to file your first annual report with the state.
Property, debts, and liabilities of the LLC transfer to the new corporation.
Talk to an Attorney First.
Forming or converting a business may sound simple, but every case is a little different. Make sure your company meets all legal requirements to avoid trouble down the road.
The attorneys at Adams & Miller understand the business needs of their clients. Contact Adams & Miller, P.C. at 256-251-2137 to schedule an appointment. Though our offices are in Anniston and Birmingham, we help clients in Talladega, Gadsden and surrounding communities.
by Bill Miller | Aug 3, 2018 | Estate Planning
Would you hire a heart surgeon to wire the electricity in your home? When you’re dealing with something important, really important, that could affect your life and your loved ones, you need help from someone who specializes. If you’re wondering whether you need to hire an Alabama Estate Planning attorney to put together your estate plan, the answer is “yes!” And here’s why:
Estate Planning Is Not a Deck
Do-it-yourself works for some projects, but not others. Building a deck on the back of your house is one thing. Building a future for your family and yourself is entirely different.
An experienced estate planning attorney will see the big picture. He or she will analyze the moving parts of your life and get them humming along in sync. For instance, naming beneficiaries for some of your financial accounts is recommended. However, it can throw the rest of your estate plan out of whack. One heir could accidentally receive a bigger or smaller piece of the pie if your plans are not carefully crafted and updated regularly.
Plan for the Future
Writing a Will using an online website gives you a very simple estate plan.
But you need more than a Will.
A Will does not plan for possible incapacity or disability. It only takes effect upon your death. A complete estate plan addresses potential problems head on. In some cases, a Will-based estate plan may not even be the right option for you. Some estate plans are founded on trusts. Some of those trusts help provide income during retirement or prevent you from being disqualified for Medicaid.
Get the Right Asset Protection
Not all asset protection strategies work for all people. Any trusts or other asset protection vehicles should be crafted by an attorney who knows Alabama law.
And there’s more than one type of trust – which one might you need? Trusts can be complicated and lead to completely unintended consequences. Talk to your estate planning lawyer to learn what’s right for you.
Estate Planning Can Have Life-Changing Consequences.
Isn’t it best, then, to hire an Alabama estate planning attorney to get the right advice?
For a free consultation with an experienced Alabama attorney, contact us at 256-251-2137 or use our convenient Contact Form. We have offices in Anniston and Birmingham and serve clients in Gadsden, Hoover, Talladega, Vestavia Hills, and surrounding areas.
We also offer free workshops and resources.
by Bill Miller | Jul 31, 2018 | Medicaid, Medicaid Planning
Moving grandfather to the nursing home was hard enough. But applying for Medicaid at the same time? Very stressful, but it is even worse if you submit incomplete or incorrect paperwork. This could delay much-needed Medicaid benefits. Read on to learn more about the supporting documents to submit with a Medicaid application.
The Application
Medicaid consists of more than one program. For example, there’s a program for children and a different one for nursing home residents.
Alabama Medicaid maintains online applications, as well as forms that might need to be attached. Paper applications are available at local Medicaid offices.
Sometimes documents must be attached to the application. For example, if the applicant needs an authorized representative to help with the application, Appendix C should be attached to paper applications.
Make sure you use the right application, filled out completely with all attachments.
The Supporting Documents
The first thing to understand is that Medicaid wants documents going back five years from the date of application (the Look Back Period). The applicant should submit bank statements or balances (monthly for the first 12 months of the Look Back Period, quarterly for months 13-24, and June and December for months 25 through 60). Medicaid will also want to see proof of gross income, including VA benefits, Social Security benefits, rental income, pensions and retirement funds, wages, and interest. In addition, some or all of the following documents from the Look Back Period will be required:
| Annuities |
Life insurance policies |
Power of attorney |
| Long-term care policies |
Receipts and titles |
Bonds |
| Wills |
Trusts |
Social security card |
| Promissory notes |
Stocks |
Burial contracts or policies |
| Conservatorship papers |
Property deeds |
Medicare care |
| Loan documents |
Retirement account statements |
Any other documents that are requested |
| Guardianship documents |
Medicare Part D policies |
|
The applicant should keep copies of all supporting documents, as well as the application and any correspondence sent or received.
Sound Complicated? It is, but We Can Help.
The attorneys at Miller Estate and Elder Law assist clients with applying for Medicaid benefits. We also help with Medicaid planning and estate planning. For a free consultation with an experienced Alabama attorney, contact us at 256-251-2137 or use our convenient Contact Form.
We also offer free guides, videos, and workshops.
We have offices in Anniston and Birmingham and serve clients in Gadsden, Hoover, Talladega, Vestavia Hills, and surrounding areas.
by Bill Miller | Jul 27, 2018 | Estate Planning, Probate
Josiah M. had few possessions when he died, though he had many loving friends and family. He lived in a rented independent living facility, owned one car, and had several small bank accounts. His family began the process of probating his estate. His attorney suggested they take the small estate probate route.
Probate occurs when a judge determines that the Will of a deceased person is valid. It also refers to the administration of the estate whether a Will exists or not. Many people try to avoid probate proceedings because they can be expensive and lengthy.
A Fairly Easy Solution
Sometimes the person who passed away, the decedent, does not own much property at the time of death. Even then, some of the property they own may not become part of their probate estate.
A surviving spouse or one of the heirs can file a petition for summary distribution of the decedent’s personal property. Note that real property – like homes or land – cannot be transferred through a small estate proceeding.
Summary distribution can be requested under certain circumstances:
- The value of the estate does not exceed $25,000.
- The decedent was an Alabama resident at the time of death.
- A petition for appointment of personal representative is not pending or has not been granted.
- It’s been at least 30 days since the notice of filing was published.
- Funeral expenses have been paid or arrangements have been made to pay them.
- A probate judge has determined succession if the decedent did not leave a Will.
- Decedent’s Will, if any, has been filed in the office of the judge of probate.
- Notice of filing the petition has been published in a local newspaper or posted at the courthouse.
- All claims against the estate have been paid or arrangements have been made to pay them.
For people trying to probate a small estate, this procedure provides a faster, easier way to settle the estate.
Use the Right Probate Procedure When the Time Comes.
Josiah’s family was able to file a petition for summary distribution of his estate. He did not own real property and his probate assets (excluding bank accounts and insurance policies with named beneficiaries) were worth less than $25,000. His estate met all the other qualifications, also.
The attorneys at Miller Estate and Elder Law assist clients probate whether the estate is large or small. For a free consultation, contact us at 256-251-2137 or use our convenient Contact Form. Although we’re located in Anniston, we also help clients in the Birmingham, Gadsden, Hoover, Talladega, Vestavia Hills, and surrounding areas.
by Bill Miller | Jul 24, 2018 | Business
Starting a business is exciting, but there are so many decisions to make. One choice affects every other aspect of the business: choosing which of Alabama’s business entities is right for you.
Sole Proprietorship
One of the easiest types of business to start, a sole proprietorship has only one owner.
Sole proprietors do not have to file formation documents or be registered with the State of Alabama. However, sole proprietors may need to apply for licenses and registrations depending on the type of business they operate.
Decision-making is straightforward. Management is flexible, because the owner does not have to answer to shareholders, other owners, or a board of directors. However, getting opinions and backup from other owners could lessen the stress of day-to-day operations.
One disadvantage to sole proprietorships is that the owner is completely liable for the business. In fact, the owner’s personal assets may be vulnerable.
Partnership
Two or more people are required to form a partnership. Typically, the partners will sign some kind of agreement to form the partnership, although it not required by law. As mentioned above, though, state and local governments may require licenses or registrations to operate within their jurisdictions.
Management and decision-making is still fairly flexible. Partnerships can be unstable, though, and dissolve when one or more partners leave the business.
Partners may find it difficult to sell or otherwise transfer their business interest.
Corporation
This is one of the more complicated business entities. Corporations are legal entities separate from the persons who own them.
Forming a corporation in Alabama requires filing documents, including a Domestic Business Corporation Certificate of Formation. The completed certificate and filing fees should be filed with the Office of the Judge of Probate in the county where the corporation’s registered office is located. Additional documents are filed, including a Name Reservation Certificate from the Alabama Secretary of State’s office. A charter that states the purpose of the business is sent to the new corporation.
One big advantage to the corporate structure relates to liability. The owners of the corporation have limited liability for the corporation’s actions. It’s also easier for shareholders to transfer or sell their interest in the corporation.
Taxation is a disadvantage, however. The corporation’s income is taxes, but also the dividends paid to the shareholders. Corporations are also required to file annual reports.
Limited Liability Company and Limited Liability Partnership\
Some feel these structures offer the best of both worlds: limited liability of a corporation, but the lower taxes of a partnership. LLCs and LLPs are relatively inexpensive and easy to form.
New owners do need to register with the Alabama Secretary of State/ and file a Certificate of Formation with the Office of the Probate Judge.
As the names indicate, owners of these business entities enjoy limited liability. Taxes are paid on a pass-through basis; the LLC and LLP are not taxed, but the owners are.
Learn More About Forming a Business in Alabama.
The attorneys at Miller Estate and Elder Law efficiently assist their clients with business matters. For a free consultation, contact us at 256-251-2137 or use our convenient Contact Form. Although we’re located in Anniston, we also help clients in the Birmingham, Gadsden, Hoover, Talladega, Vestavia Hills, and surrounding areas.
