<![CDATA[Cincinnati Attorney Elliott Stapleton - Legal Topics]]>Wed, 19 Jun 2013 14:03:41 -0500Weebly<![CDATA[How to Win at Winning the Lottery]]>Thu, 06 Jun 2013 21:29:03 GMThttp://www.elliottstapleton.com/2/post/2013/06/how-to-win-at-winning-the-lottery.htmlPicture
For those that play the lottery, if you are lucky enough to have your numbers hit, a procedure should be followed to protect the payout. The procedure limits the negative implications of winning and limits the likelihood of future bankruptcy.

How do you claim lottery winnings?

To avoid an avalanche of family members and friends hounding you for loans or gifts, the best way to claim lottery winnings is anonymously. To claim a prize anonymously, a “Blind Trust” is created to shield the identity of beneficiaries and only disclose the name of the Trustee. The Trustee for the Blind Trust then claims the prize for the benefit of the respective beneficiaries.

If there were a pool of co-workers, friends, or family members who claim the prize, an entity (such as a partnership, LLC, or corporation) can be created to direct proceeds to each individual. This allows for structure in the distributions disproportionate allocations in the event one member of the pool is entitled to a larger or smaller share of the proceeds.  

Can I buy all of my friends and family gifts?

Yes, but not before evaluating the tax considerations.  Lottery winnings are taxed as ordinary income. While the lottery commission does withhold some taxes, there may be additional taxes due by April 15 of the following year; thus, it is best to hold off on spending until you determine how much the IRS will take.

Additionally, there are gift tax implications for giving things away.  If you decide, I want to buy a car for every member of my family; a gift tax return will need to be filed for every vehicle. To the extent you give away more than the lifetime gift tax exclusion amount, additional estate tax will be owed. 

]]><![CDATA[What is a Purchase Agreement?]]>Wed, 22 May 2013 19:59:44 GMThttp://www.elliottstapleton.com/2/post/2013/05/what-is-a-purchase-agreement.htmlA Purchase Agreement establishes the terms and conditions for the purchase of real or personal property. In Ohio, there are specific requirements for disclosures related to the sale of real property. As with all agreements, it is vital to create clear, objective standards for payment and delivery of the property.]]><![CDATA[Operating Agreement for an Ohio LLC]]>Tue, 23 Apr 2013 19:58:22 GMThttp://www.elliottstapleton.com/2/post/2013/04/operating-agreement-for-an-ohio-llc.htmlEvery Limited Liability Company should have an Operating Agreement. This Agreement establishes the rules in which the owners of an LLC will conduct business.

Without an operating agreement, it is unclear to the members what rules they must abide by when conducting business, distributing profits, and voting on important ownership matters.  This also allows the business to establish voting rights, creditor protections, and standards to resolve disputes among the members. ]]><![CDATA[Form Ohio LLC]]>Sat, 23 Mar 2013 13:05:47 GMThttp://www.elliottstapleton.com/2/post/2013/03/form-ohio-llc.htmlPicture
If you are considering the investment of time, energy, and money that goes into a new business, it is important to take the proper steps to protect your investment and to protect your personal assets. If you conduct any business before your LLC is in place, all of your personal assets are at risk. 

Filing your Articles of Organization is not the only step in creating an Ohio LLC. Here is a summary of issues related to the proper formation.

What is LLC?

LLC stands for Limited Liability Company and indicates how liability is limited to the assets of the business.  Ohio business law allows owners to insulate their personal assets from the assets of a business.

The value of an LLC is best articulated by explaining what happens if you do not have the proper measures in place: 

Example: You decide to start a business that owns rental property in a college town and treat the venture as a sole proprietorship.  One of the tenants is a star college athlete on the basketball team. While moving in, he falls down the stairs and breaks both legs (and is no longer eligible for the NBA draft). 

When the athlete files the lawsuit, he is going to name you as a responsible party.  If the athlete is successful and receives a substantial judgment for the loss of his first NBA season, he will use that judgment to take whatever assets you have.

This includes your rental property, bank accounts (business and personal), your home, investments, vehicles, personal property, and a percentage of your wages until paid in full. 

Now what would happen if we had this identical situation, but the rental property business was an LLC instead of a sole proprietorship? As long as the proper procedures are followed, the athlete can only reach the assets of the business if it is sued; rental property and bank account of the business.

While you may have an insurance policy, there are limits to that policy including covered incidents and a total policy limit. In this example, even a policy limit of $500,000 - $1 million would not be enough to cover your total liability.

This may seem to be an extreme example, but business owners cannot control who uses their products, services, or enters their property.  It is always best to manage the amount of risk you have at any given time.

Does filing with the Ohio Secretary of State automatically provide Limited Liability in business transactions?  

No.   Filing your Articles of Organization alone does not automatically give a business owner limited liability; it authorizes you to create a business. 

Think of the state’s authorization as a building permit to create a business. There are steps that must be taken and maintenance that is required to achieve limited liability.

What steps must be taken to ensure an Ohio business owner has Limited Liability?

The key is to establish a separate entity; think of the business as a person separate from the owner.  For example, the entity needs a Tax Identification Number from the Internal Revenue Service, its own bank account, and the necessary internal documents of a business.  

To ensure all of the proper procedures are followed, the best investment is in a qualified counsel.

Feel free to contact me with questions.
]]><![CDATA[Starting a Business after Retirement]]>Tue, 19 Mar 2013 12:56:53 GMThttp://www.elliottstapleton.com/2/post/2013/03/starting-a-business-after-retirement.htmlPicture
Many retirees want to use their knowledge and experience after retirement, but on their own terms. This can be accomplished by acting as a consultant for either individuals or companies. In some cases, the company you retired from would still like access to your expertise.

How do I protect my personal assets?

If you are considering the investment of time, energy, and money that goes into a new business, it is important to take the proper steps to protect your investment and to protect the personal assets you have worked your entire life to earn.  

For consultant companies, this protection can be provided by forming an Ohio LLC.


What is LLC?

LLC stands for Limited Liability Company and indicates how liability is limited to the assets of the business.  Ohio business law allows owners to insulate their personal assets from the assets of a business.

For all new businesses, I offer a free initial consultation. In that meeting, we will discuss your goals and the steps that must be taken to achieve those goals. In the first meeting, we will also discuss the fixed fees for services.  To get started, feel free to contact my office and schedule an appointment.

Here is a link to download an Ohio Business Checklist.

]]><![CDATA[When is a Trust Necessary? ]]>Fri, 09 Nov 2012 16:21:01 GMThttp://www.elliottstapleton.com/2/post/2012/11/when-is-a-trust-necessary.htmlPicture
For business owners in Ohio, it is important to create a Trust. By establishing a Revocable Living Trust during your life, if you become disabled or deceased the Trustee appointed will be able to immediately take control of your company.

If you only have a Will, there could be weeks of delay before your Executor is appointed by the Probate Court. This delay can result in employees not being paid on time and other missed deadlines.  

Here are four more advantages to using a Trust as opposed to just a Will along with a link to an article discussing each in more detail:
  1. Savings of Costs,
  2. Estate Tax Benefits,
  3. Creditor Protection,
  4. Time, and
  5. Protecting Beneficiaries from Themselves.
]]><![CDATA[Why is an Attorney better than LegalZoom?]]>Thu, 11 Oct 2012 03:12:47 GMThttp://www.elliottstapleton.com/2/post/2012/10/why-is-an-attorney-better-than-legalzoom.htmlPicture


Legalzoom may have an excellent marketing strategy, but they are not a replacement for your Attorney.

An Attorney is ethically bound to look out for your best interest above all else. Legalzoom exists to make a profit and if that means selling you every form they have (regardless of your needs) I assure you they will do it.

Here is an article on the specific differences between a Licensed Attorney and LegalZoom.

When forming an Ohio LLC, creating a Corporation, preparing contracts for your business, or registering trademarks it is imperative to obtain advice rather than relying on a reprinted form without understanding what it means, how to use it or which state it was intended to be used in.







]]><![CDATA[Why do startup businesses need a nondisclosure agreement or NDA?]]>Mon, 28 May 2012 14:51:27 GMThttp://www.elliottstapleton.com/2/post/2012/05/why-do-startup-businesses-need-a-nondisclosure-agreement-or-nda.htmlWhen starting a business with a unique idea, it is important to limit your disclosure of this idea to those who have signed a non-disclosure agreement (NDA). 

The purpose of an NDA is to restrict the type of disclosure a party can make after you provide them with important information about your idea or concept.

Once information is no longer confidential,  it can be used by anyone to compete with your company before you have a chance to establish your brand identity. (See post on Trade Secrets). Without an NDA in place, a business owner could lose its competitive advantage.

]]><![CDATA[What are the Estate Tax Credits for 2012 and 2013? ]]>Sun, 20 May 2012 21:01:55 GMThttp://www.elliottstapleton.com/2/post/2012/05/what-are-the-estate-tax-credits-for-2012-and-2013.html
_ Small Business Owners should be aware of the current Estate Tax Credits for 2012 and changes that take effect in 2013. These will have a drastic impact on succession planning for Ohio small businesses.

Federal Estate Tax

Currently, the Federal Estate Tax credit is equivalent to $5,120,000.00 per person (any dollar under $5,120,000.00 passes free of Federal Estate Tax. Married couples are able to transfer their unused Federal Estate Tax credit to the  surviving spouse that provides the equivalent of a $10,240,000.00 per couple credit (also known as “Portability”).

Unless the President and Congress can agree on an extension of the current law, the Federal Estate Tax credit will be reduced, beginning in 2013, to $1,000,000.00 per person, without Portability, at a rate of 55%.

Ohio Estate Tax

In 2012, the Ohio Estate tax rate is 6% of every dollar between $338,333.33 and $500,000.00. For every dollar above $500,000.00, the tax rate is 7%. This calculation does not include life insurance proceeds.

Effective in 2013, the Ohio Estate tax has been repealed. This will be a substantial savings for residents of Ohio. Before transferring your residence to another state, it is important to check that state’s law regarding Estate Taxes.
]]><![CDATA[Paying Ohio Sales Taxes]]>Thu, 03 May 2012 15:00:07 GMThttp://www.elliottstapleton.com/2/post/2012/05/paying-ohio-sales-taxes.html Vendors’ licenses are required for taxable sales. So what are taxable sales?

Every company sells goods, services or a combination of both. Some of these sales are subject to sales tax and other transactions are not.

A business owner should be certain about sales tax, because a mistake could be devastating.  There are different types of vendor licenses in the State of Ohio.
  • Regular vendor's license
  • Delivery vendor's license          
  • Transient vendor's license
  • Service vendor's license
For more information on vendor's licenses, click here

The decision on sales tax and the amount to be collected should be evaluated with your certified public accountant or tax adviser.]]>