Monday, 29 October 2007
You have to work in order to survive. Your survival is ensured by whatever you earn form working. There are different types of jobs that you can opt for (provided you are qualified to serve the role demanded out of you). Once you decide to take up a job, you are required to sign an agreement. Whether it is a permanent job or a temporary one, there are certain rules and regulations of the company that you are supposed to follow as one of their temp employees. When you apply for a temporary job then you have to sign a temporary employee agreement. Every person who joins as a temporary employee has to sign this agreement.
An agreement for temp employment is different for different companies. But there are certain things that are same for each and every company. In most of the companies, the temporary employees are appointed as an hourly temporary employee. In these cases, the conditions of employment are set by an agreement that is referred to as temporary employment agreement.
The temporary employment agreement consists of all the details regarding the assignments that you are supposed to do during your job period. It will also have the details of the wages that are you supposed to get. These wages are sometimes on hourly basis or on the amount of work done basis. This means that either you will be paid for the number of hours that you work for or according to the number of assignments you accomplish. This depends upon the management of the company. Before taking up the job, you should be aware of the criteria for your wages. This will help you to keep a track of your work and your remuneration so that you can cross check it with management's records.
This agreement also contains details of any kind of additional facilities provided by the company, be it life insurance or any retirement plan or things like that. The agreement also asks you to maintain confidentiality about company dealings. According to this clause, a temporary employee is supposed to keep the information related to the firm confidential. At the end of the agreement, you have to sign acknowledging that you have read all the clauses and you agree to follow them.
Temporary employee agreement plays an important role in temporary jobs as it decides a lot of things for the temp employees. Hence, it is very important to be extremely careful while signing any such agreement. Make sure that the temporary employee agreement has all the details of your salary and working hours. You should also ensure that the agreement has the same things in writing that were told to you at the time of your appointment.
Tuesday, 23 October 2007
How do you hire a full-service realtor and only pay half a commission? It is always surprising when a homeowner is going to hire a realtor to sell his property, especially when he next complains bitterly about paying 5% or 6% to someone who he believes does little or no work. Usually the seller marks up the property to cover the commission which over-prices the property and the result is it doesn't sell.
Usually, the commission paid to a realtor is split equally between himself and his "broker", who is the licensed agent in charge of a particular firm. If the commission on a sale is $20,000, the realtor and the broker each get $10,000. Newer methods of payouts to agents include paying "desk fees" to the broker in exchange for higher payouts. For example, if the agent pays $135/month as a "desk fee" he may be entitled to a 95% commission while an agent paying $60/month may only entitled to a 70% payout.
If the agent doesn't sell the property he listed, but another agent does, the buying and selling brokers each get half of the commission and the 3% commissions are again split with the agent so he gets 1 1/2 % net. So for a $20,000 commission the split looks like - $5,000 each to the two brokers and $5,000 each to the two agents. This is a simplified summary of the process but illustrates the payout procedure. If the agents are on a higher payout because of their monthly desk fees, their portion of the commission is increased and their broker's portion is reduced proportionally. Industry statistics show that 95%+ of the time the listing agent does not sell the property! So the real money for a realtor is in getting the listing and having another realtor sell it. The largest commission producers in the industry sell listings and not properties.
The way to save at least half of the realtor's commission is to list with a flat-fee broker who will list the property on the MLS (Multiple Listing Service) and Realtor.com but who does not show the property. The buyer for your property will come from a "buyer's agent" who brings a client to see your home and make an offer. He is interested in receiving his usual 50% of the full commission or 3% of the sales price. If you offer a 3% commission to the buyer's agent, you have saved 3% by not having to pay the seller's agent (listing agent)! In the above example of a $20,000 commission, the agent who brings the buyer still gets $10,000 but you are saving $10,000.
What if you are unfamiliar with the sales and contracting process and you need help? For the $10,000 commission savings you can hire an attorney to review any contract and give you advice usually for less than $500 so you are still ahead $9,500. But better yet, the attorney can give legal advice that your realtor can not, and you have recourse against your lawyer if something goes wrong.
So to save at least 50% of your commission, should you decide to have a realtor sell your house, use a buyer's agent only and offer him a 2.5% or 3% commission. Another unique benefit of only paying a buyer's agent is that if desperation sets in and you need to sell quickly, you can increase your payout to the buyer's agent and attract many more buyers than using a seller's agent. The highest commission seen in the past year is a 12% commission to buyer's agents for condo units. In the depressed condo market these days, it is not uncommon to see 10% commissions to buyer's agents. So if you have decided to sell your home on the MLS using a realtor, you can save substantial money and sell your home faster by focusing on paying only a buyer's agent to sell your home.
Dave Dinkel has over 30 years experience in real estate investing which has given him a unique perspective into the workings of the real estate market. He has developed a CD entitled "How to Sell Your Home in as Little as 72 Hours", available at no cost for a limited time by going to [www.FSBOautopilot.com] (link: http://www.fsbotlc.com)
Monday, 22 October 2007
Before starting the process of incorporating your business, you need to decide whether incorporation is right for you and your business.
The main benefit of becoming incorporated is the limited liability status that incorporation affords the company’s owners. Personal liability of the owners is restricted to their capital invested. The primary disadvantages of incorporation are double taxation and the additional burden of statutory controls and record keeping. Double taxation relates to the taxation of the corporation’s profits and the taxation of the dividends from the net profits. It may be possible to avoid the double taxation through filing to the IRS to become an S-Corporation (professional taxation advice should be sought on these matters).
Once it is decided that becoming incorporated is the right course of action for your business you need to decide on a company name and in which state to incorporate.
Name availability can be checked with the secretary of state for your chosen state of incorporation. At the same time you should also do a trademark check, this can be done at the US trademark website.
If you business is small and only likely to trade in your own state of residence then your own state is likely to be the one most suitable for incorporating in for your business. If you are likely to trade across states, and you are confident of significant growth, then a state such as Delaware or Nevada may be appropriate as they offer favourable trading conditions, although your set up costs and ongoing costs will be higher.
Once you have your name chosen and a state of incorporation decided on you are ready to prepare your incorporation documents. The documents will include:
- Certificate of Incorporation / Articles of Incorporation
- Bylaws for your Company
- Resolutions of the Board of Directors
- Stockholder Resolutions
- Stock Ledger
- Stock Certificates
With the introduction of the latest Corporation Act, the incorporation process has become less complex, and as such there are now many companies on the internet who will assist you to incorporate, and with simple incorporations being performed online. It is always advisable to seek professional legal and taxation advice though in advance of incorporation.
Once the certificate of incorporation and associated documents are filed with the secretary of state in your chosen state of incorporation your corporation becomes official.
Stock certificates should be issued to shareholders in compliance with securities laws and all corporate actions and meetings minutes should be recorded in your official Corporate Minute Book. You will also need to elect and record officers and directors of the corporation, the number of directors will depend on your local state law.
You will also need to contact the IRS and obtain your state and federal tax ID numbers, the federal forms you need can be obtained from the IRS website.
You should also decide whether or not filing for S-Corporation status with the IRS is appropriate for your business, as a small company the benefits of avoiding double taxation may be worthwhile. After becoming incorporated your will need to open a corporate bank account and ensure you have appropriate accounting systems and records in place to meet statutory requirements. If your newly formed corporation is a new business you should check with the local authorities to see if there any special licences required for your type of business to trade.
If you have to hire staff, you should have formal contracts of employment in place stating the terms and conditions of employment, and where necessary have confidentiality agreements in place.
Richard Taylor MBA is a Chartered Management Accountant and Corporated Director with a specific interest in small business start ups and How To Become Incorporated
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Friday, 19 October 2007
Are you now really to sell online? By now, you could have established a business and decided which product or service to offer. But how would you write a sales letter that would really help you reach your goals on your business. Your main purpose right now is to sell and you need to sell a lot so that you will get the returns on your investments. Selling is really hard if you do not know how to sell the right way. Your sales letter will do this part so better devote extra time when writing a sales letter.
So what does a good sales letter need to have so that you can demand your customers to make an action? Read on and just after getting to with this information, you are ready to write a killer sales letter.
1. Make a very good offer. Be sure to give your customers an irresistible offer. Your customers need not think about it, they just have to take advantage of this offer. It should create a short sure deal.
2. The offer should be unique. It should be way, way better than the offer of other competitors. Customers should buy from you and need not scout out for other suppliers.
3. This offer should solve an urgent problem and that customers need not go through this problem when they buy your product. Your product is the solution, the only solution that is.
4. Provide some teases that would get your customers hunger for more information about your product. Give them that curiosity needed so that they would buy and try your products in due time.
5. Close your sales letter by calling them to do an action. That is why it is important to create a pressing need on your letter so that customers would be able to think about buying the product at the end of it all. This is the result you need and you are doing it on your sales letter.
Do you want to learn more about how I do it? I have just completed my brand new guide to online writing success, ‘Secrets of Writing Online‘
Tuesday, 16 October 2007
If you expect to leave an estate, you should do whatever you can to ensure that it is not subject to the probate law in your state. Why?
Even though you will not be around to experience what happens while your estate is wends its way through the probate process as defined by your jurisdiction’s probate law, your heirs will. And your executor will have his or her hands full meeting all the requirements established by that probate law. Those duties include gathering and appraising your property, paying off your creditors and filing your estate taxes return; proving that your will is valid, and following your will’s instructions in distributing your estate to your named heirs.
Probate laws are designed to make sure that your wishes are honored, at the cost of a time-consuming, expensive process. The US courts are already backlogged, so your estate will simply be put in line behind those of everyone who died ahead of you. Your survivors will be faced with an indefinite delay before they receive the assets you intend them to have.
Probate law requires that the attorney handling your estate be paid a statutory fee based on its total value, usually between 2% and 4%, unless his or her hourly fee exceeds that. Your lawyer will almost certainly take the larger amount. And your estate will also be reduced by probate court fees.
Another unpleasant reality of probate law is that the probate process is public from start to finish. Every decision a judge makes regarding your estate is a matter of public record. Your will, which is also a public document, can be an indication of some very sensitive family conflicts which you would rather never see the light of day. But if you do not take the necessary steps to avoid probate, probate law will require their publication.
When you decide to have your will drafted, don’t expect your attorney to volunteer the disadvantages of having your estate probated. Probate law does not require them to do much for their percentage of your estate; the real work will fall to your executor. Your attorney, more than likely, will turn the job of drafting your will, and any jobs associated with the actual probate procedure, over to a legal assistant. For more information on estate planning and the probate process visit http://www.estatecontractstrusts.com
It’s not at all exceptional for the attorney’s fees on a half-million dollar estate to reach $20,000 during the probate process, while your survivors are waiting and you are no longer in a position to fix things.
Then there is the problem of which arises if you own property in different state, or even worse, countries. Your estate may be subjected to the probate law in each of them, with attorney’s fees being charged for each proceeding.
Probate law, in addition, will require that your personal property be inventoried and appraised, and the fees for that will also come from your estate. If your estate runs out of cash, some of its assets will have to be liquidated to pay for the various fees, because until all the estate debts are cleared, none of your heirs can receive their inheritances.
If you now understand why probate is a bad idea, about something for which you will pay only once: estate planning.
Don't leave your estate planning to chance. Learn about estate trusts to protect and safeguard your assets. Find out what is involved with living and revocable trusts and estate probate to ensure your assets are distributed as you intention.
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Friday, 12 October 2007
Options are an extremely attractive and economical way to enter the stock market, since the capital expenditure is minimum in comparison to a straight stock investment and also the return on investment can be a lot more. They offer higher leverage since they are cheaper to purchase as individuals are only purchasing the premium to buy or sell a certain option, that is to say a right to buy or an obligation to sell.
An option is a right to purchase or sell some shares within a specific period of time. If traders purchase a "call" they suppose that the stock price will rise and if purchase a "put" they believe the stock price will fall. When individuals purchase a call it is termed as going "long" and a put is termed as going "short." Call options give individuals a right to buy the underlying asset, the real stock and put options give a right to sell the underlying asset, the actual share. If the option is put into effect, individuals have to buy the underlying security at the share price.
Termination period of options is generally the third Saturday of every month, subsequently the option expires worthless and the investors lose their right to buy or sell the underlying security at the specific price.
Stock market option trading is a source of income for many people. Individuals can indulge in stock option trading to shield themselves, such as an insurance policy against losses and can also be utilized to secure profits if they are traded correctly. Stock options trading offer investors flexibility and power to protect their stock portfolio or make more investment profits. Even though stock option trading offers several investment benefits, they are not intended for everyone. Much like the returns that can be large, the losses too can be huge. A lot of information must be processed prior to taking any decision regarding stock options trading.
Stock option trading is more intricate compared to stock trading, as traders have to choose from various variables, in addition to the direction they believe the market will move. Careful consideration and sound capital management techniques are a necessity for successful stock option trading.
Stock Trading provides detailed information on Stock Trading, Online Stock Trading, Option Stock Trading, Stock Trading Systems and more. Stock Trading is affiliated with Swing Stock Trading.
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Thursday, 11 October 2007
When you are apartment hunting, prepare a rental search plan. Be sure to know in advance what you want in an apartment and what you can live without. Decide in advance what areas of the city you could consider living in and make a list of apartment buildings within that perimeter.
Be sure to consider how far and how convenient it will be for you to travel to your job or your school or your family and friends. Also, how far is the apartment from stores, banks, hospitals, Church (if you attend) etc. If you have a car, make sure that there is adequate and convenient parking space 24/7. If you don't drive make sure that there is close by public transportation.
Narrow your apartment locating to the size of rental unit you need. Studio apartment or one bedroom apartment or 2 BR apartment or more. Are you considering a furnished apartment or do you possible need a short term rental. If you are renting an apartment with a cat, dog, or other pet, you need to find out which apartments allow renting with pets and which do not. And, if they do allow pets, is there an additional security deposit required and if so, how much it is. Do you need an apartment complex with an exercise room or tennis courts or a pool or a recreation room, etc. or do you simply need and desire a nice clean and quiet pad.
Be realistic about what you can afford. Most apartment renting guides suggest that your rent should not be more than 25% to 30% of your income. This can vary depending on the income bracket, but be sure to be "real world" when budgeting additional apartment expenses such as heating and air conditioning and other utilities. If you fall short of affording the apartment of your choice, you might consider sharing an apartment with a roommate or roommates. Keep in mind that living with roommates can help you afford an upscale apartment or even, in some cases, luxury apartments, but it also has extreme restrictions to your privacy.
If you are familiar with the area and its neighborhoods, that gives you a distinct advantage for your apartment search. If, however, you are relocating to a new city or are not particularly knowledgeable about the city, you may want to contact an Apartment Locator or an Apartment Finder.
Once you narrow your search for apartments down to apts which suit your needs and desires you must be well organized & well prepared for your visits to the apartment complexes. When inspecting the rental premises be on the alert for unsafe conditions, excessive noise from traffic or playgrounds or neighbors. Visit the apartment building at night as well as the daytime hours. This will give you a more comprehensive understanding of the total space you will be residing in.
When you find the apartment complex that meets your renting needs and desires, you must be ready to put your "best foot forward" when you meet the apartment's rental agent. This person may be the apartment building manager or a renting agent for the apts. You should prepare for this apartment renting interview in a professional and intelligent manner. Be advised that you are going to be asked to provide proof that you are a reliable prospective tenant. You are most likely going to need references from previous landlords. You may also be required by the apartments to show that you are gainfully employed and can afford the rent. Many landlords may require a credit report. If you are a first time renter and/or you have limited credit history you may be asked for references from family, friends, employer, professionals, etc. Likewise if you are renting with bad credit you will certainly want to come to the interview with a strong selection of references.
You are not necessarily restricted from apartment renting with less than perfect credit, but you may be required to put up an additional security deposit and possibly have a credit worthy person co-sign the apartment lease with you. Don't unprepared for by requests for any of these things. Be sure to fill out a 100% truthful apartment rental application and come to the interview with references, proof of employment, credit information and any other renting resources at the ready. If you do have a credit history or renting history that might be detrimental, going through an apartment locator or apartment finder may be the best solution. They will present your history to the landlord for you, (make sure they are 100% truthful about it) and they can also be quite helpful and save you a lot of time because they most likely will know which landlords and apartments are more lenient in these circumstances. They can also advise you as to exactly what kinds of references and documents you might need to prove that you can be a responsible tenant.
You Have Located Your “Dream Apartment”
Once you have located your “dream apartment”, or as close to your perfect apartment as possible, now it is necessary to pay extremely close attention to the particulars of the rental agreement. An Apartment Lease is a contract between you and the landlord. Once agreed upon and signed by the tenant and the landlord, the rental lease creates obligations and restrictions for both parties. The most obvious covenants of the apartment lease are the length of the rental, (Six month lease, one year lease, two year lease, etc.) The amount of the security deposit, when the rent is due, who is responsible for what utilities. Also in that apartment lease, however, are stipulations, (sometimes in small print) that can cover a great variety of landlord and tenant obligations and restrictions. They can include, but are not limited to, the following:
• Maintenance of the apartment
• Care of the premises
• Cleanliness
• Insurance
• Governmental regulations
• Eminent Domain
• Nuisance and noise clauses
• Stipulations as to the circumstances whereby the landlord can enter the premises
• Use of Common Areas
• Keys and locks
• Loss or damage
• Parking
• Pets
• Plumbing
• What the landlord may do if the rent is in arrears
• What the tenant can do to bring the rent current before any kind of action might be started
• Non performance or breach of the contract by the renter
• Renter’s penalties in the event of early termination
• Circumstances which might cause the tenant or the landlord to break the lease prior to the end of the term
• Heat and other utilities
• Removal of goods
• Surrender or Non-Surrender of the premises
• Waivers of various obligations
• Prohibited reprisals
• Garbage disposal
• Recyclables
• And the list goes on and on and on.
Prospective tenants should read an Apartment lease thoroughly. Prospective apartment renters should understand everything that is contained in that lease and make an informed decision to be 100% accepting of all the provisions for both the tenant and the landlord, that you are positive that you can live up to your end of the bargain and that you are comfortable with the provisions on the landlord’s end.
If you do not understand every single clause of that apartment lease then do not sign it until you do understand it. If necessary and if possible, request assistance in interpreting the lease from a trusted source such as a knowledgeable friend or family member or employer or professional, or anyone else who can understand it and explain it to you. If necessary get legal advice. It can cost additional funds if you do not qualify for free legal assistance, but that additional cost might save you a ton of money and save you a ton of heartache and aggravation down the road.
If you do not agree with any of the provisions of that apartment lease and/or you feel that you can’t live up to the tenant’s obligations, or if you are not in agreement with any of the landlord’s rights under the agreement, then do not sign the lease until/or unless it can be changed to your satisfaction. If the apartment rental agreement cannot be amended to meet your needs and desires and comfort level then do not sign the lease and do not rent that apartment. The Apartment Rental agreement that you sign as a prospective tenant will not change once you become the actual tenant of that apartment.
Good luck in your apartment search and good luck in your new apartment.
Tuesday, 09 October 2007
While there are certainly times when circumstances are such that you need to hire an attorney, many legal matters are routine. It's enormously frustrating to feel as though you have go to the expense and hassle of hiring a lawyer for a simple legal issue. Although attorneys would have you believe that every legal maneuver requires their assistance, the reality is that you often don't need a lawyer - you just need the proper legal forms.
If you were to attempt to draft your own legal forms, you'd immediately run into a roadblock. If you haven't been to law school, you'll have no way of knowing what constitutes acceptable or unacceptable legal language. And goodness knows, "legalese" is a language unto itself! Luckily, the Internet offers abundant opportunities for bypassing the expense of hiring an attorney by providing you with resources you need to do it yourself. After all, if you can download legal forms for routine matters, you can save both time and money, while ensuring that you have covered your bases in the eyes of the law.
US legal forms are fairly standardized, so there's no reason not to take advantage of online legal forms. The truth is, attorneys use template legal forms themselves. When you download legal forms, you're essentially just cutting out the middleman.
So, what kinds of legal forms might help you out? You can easily use a legal form to set up a power of attorney, for example, and not have to hire a lawyer. Likewise, you can use online legal forms to deal with a variety of personal matters, such as creating your Last Will and Testament, creating a Living Will, utilizing the Uniform Gifts to Minors Act, selling your motor vehicle, entering into a construction contract, or signing an affidavit.
Online legal forms are also helpful for matters involving real estate and property. You can obtain a lease, a rental application form, a rent receipt, a promissory note, a mortgage assumption agreement, a contract for the sale and purchase of property, an agreement for permission to sublet, and many more.
Likewise, if you are a business owner, you can save a tremendous amount of money in legal fees by utilizing business legal forms. Online forms include templates for automobile rental agreements, articles of incorporation, bylaws, assignment of stock certificates, shareholders agreements, buy-sell agreements, and subscription agreements. You can even find employment agreements and business consultant agreements.
While online legal forms can't take care of every single legal matter, they can certainly handle those that are routine. In addition to being inexpensive, online legal forms give you the flexibility you need to instantly obtain the legal form you require.
Friday, 05 October 2007
Whether you are just starting out as a landlord or you have owned rental property for a while, a good set of landlord tenant rental forms is a must for your business. It is even better if you can find some of these rental agreements for free. The landlord tenant lease forms are the single most searched for rental agreements, but there are many others that you should consider having in order to insure that your rental business runs smoothly.
Even if you are just thinking of renting out your basement or condo, a good tenant application is a form that can help you with screening prospective tenants and can save you a lot of problems down the road. Remember the best tenant eviction is the one that you avoid, so do not overlook the rental application and tenant verification process. Be sure that your rental application asks all the right questions so that you can make a fully informed decision when choosing a new tenant. Having said that, if your landlord tenant rental application is not fully compliant with today's Fair Housing regulations, you can get yourself in trouble with governmental agencies. Free landlord tenant forms are great, but be sure that they comply with these regulations.
It is important to realize that these rental forms are legal contracts, and are used when renting or leasing apartments, condominiums and rental homes. Renting your home or apartment is not as simple as just getting the rent check in your hand. You must first outline many terms and conditions of the lease agreement. These terms will legally bind you and your tenants to the agreements made in the residential lease agreement. All tenants who plan to live in your property must be listed in the contract, and also must agree to be bound by all of these terms and conditions.
Security Deposits are the single biggest reason for law suits against landlords. For this reason, it is important to have a top notch set of "Move In" and "Move Out Forms" to insure that everything is covered. Don't assume that you will all agree on the condition of the rental property when the tenant moved in. Often, when the tenants move out, there will be some minor or major damage that will need to be repaired. Unless your "Move in" inspection form is signed by both you and your tenent, it will wind up being your word against theirs. Needless to say a judge will not look favorably on your request for damages, unless you can back them up with the right proof of the condition of the rental property before the tenant moved in.
What about evictions? Yes, they are a fact of life when you become a landlord. If you never have to go through an eviction, that's great, but it is better to be prepared in advance with the right landlord forms. Be sure that you don't lose an eviction because you used the wrong form.
Wednesday, 03 October 2007
Leasing is an arrangement that provides a firm with the use and control over assets without receiving title to them. A leasing is a written agreement allowing the use of the assets for a specific period of time. The lease is signed by both the owner of the assets (the “lessor”) and the user (the “lessee”). A contract of lease may be defined as a contract whereby the owner of an asset grants to another party the exclusive right to use the asset usually for an agreed period of time in return for the payment of rent.
There are four types of fast cash leasing. The short term and cancelable lease agreements are called operating leases. Important features of operating lease are: they are convenient and offer instant services to the lessee. Examples include hiring a computer, a tourist hiring a car etc. This type of lease does not give the lessee all the benefits that are associated with the asset.
Financial leases are non- cancelable and are for a long period of time. Examples include leasing a plant, land and building etc. Financial leases are used to amortize the cost of the asset over the entire term of the lease. Capital lease is a long-term irrevocable lease agreement. In this type of fast cash leasing all the risks and responsibilities of leased property are to be borne by the lessee. Finally, there is leveraged leasing. Under this type of lease agreement, there are three parties such as the lessor, the lessee and the lender. This type of lease agreement is popular in leasing out at a very high value.
Leasing arrangements allow for the quick and easy acquisition of fixed assets by the lessee. Leasing companies are more accommodating than the banks in extending assistance. Secondly a lease arrangement provides for the better and alternative use of funds. The payment of lease rentals is tax deductible, thus causing less tax payment.
Fast Cash provides detailed information about fast cash, bad credit fast cash, fast cash advance, fast cash leasing and more. Fast Cash is the sister site of Cheap Payday Advance.
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Tuesday, 02 October 2007
Planning for unfortunate events such as serious illness or injury is rarely on anyone's list of favorite pastimes. Sometimes, though, enduring the small discomfort that may accompany preparing for the unexpected will avoid untold anguish on the part of your family and friends. This is certainly the case with the Durable Power of Attorney, an often simple document that becomes so very important if sickness or injury renders you unable to take care of your own affairs.
Power of Attorney Defined
A Power of Attorney is a document in which you (as the "Principal") allow someone else (the "Agent" or "Attorney-in-fact") to act legally on your behalf. The Power of Attorney may be limited to very specific actions that the Agent is authorized to take on your behalf. On the other hand it may give the Agent very broad powers. In either event, the Agent you appoint in the Power of Attorney should be someone that you trust without reservation. That could be a family member, an advisor, a trustworthy friend or a bank or similar institution.
The "Durable" Power of Attorney
The significance of having a "Durable" Power of Attorney is best understood if you know what can happen with the plain old garden variety of Power of Attorney.
If you sign a Power of Attorney that is not "durable," the document remains effective only while you are alive and competent to handle your own affairs. If you become incompetent or die, the Power of Attorney is automatically revoked by law and your Agent is no longer able to act on your behalf. This prevents a Power of Attorney from becoming irrevocable inadvertently, and, until recent times, it was the only way a Power of Attorney could be prepared.
The non-durable Power of Attorney has limited usefulness for family and estate planning purposes, though, because the Power of Attorney is often most needed when you have become incapacitated! That is when you really need someone else that is able to make legal decisions or take other actions on your behalf.
All fifty states now permit the use of a "durable" Power of Attorney that is not revoked simply because the Principal becomes incapacitated or mentally incompetent. This makes the Durable Power of Attorney a far more reliable document, particularly for family and estate planning purposes, since you may now authorize your Agent to act on your behalf even after illness, injury or other cause has rendered you unable to manage your own affairs. Even with a Durable Power of Attorney, however, the Principal’s death causes an immediate revocation of the document and termination of the powers that are given to the Agent.
A Matter of Convenience
The Durable Power of Attorney is often used as a matter of convenience.
Suppose, for example, you have your home listed for sale. You have also planned a long awaited trip to visit Aunt Trixie in Deadwood, South Dakota, and you are concerned that an interested buyer may come along while you are on the road. A Durable Power of Attorney would be handy here to appoint someone you trust to act in your absence to negotiate the sale and sign any documents that are needed to make the deal binding.
The Durable Power of Attorney could be prepared so that it is effective only until the date you plan to return from your trip, and it might describe specific terms that your Agent must include in the sale, such as the minimum sale price that is acceptable to you.
A Matter of Protecting Loved Ones
What happens if, from illness, injury or another cause, you become physically or mentally incapacitated to the point that you are no longer able to handle your own legal affairs?
Let’s suppose again that while you are incapacitated it becomes necessary to mortgage your home to pay your medical bills. Who will sign the mortgage? Even if your home is jointly owned with your spouse, he cannot obtain a mortgage without your signature.
In those circumstances it would be necessary to request the local probate court to appoint a guardian for you that has the power to handle your legal affairs. In many states, this type of guardian is referred to as a “conservator”. Included in the conservator’s powers might be the power to borrow money and sign a mortgage on your behalf making it possible to obtain the funds needed to pay the medical bills.
However, you may have heard that it is advantageous to avoid probate whenever possible, particularly if there is a good alternative available. The delay and expense associated with probate proceedings and the fact that they are conducted in the probate court, a public forum, make that good advice in most circumstances. And there is a better alternative than probate, but it requires you to act before the incapacity arises – you need to sign a Durable Power of Attorney.
When used in this estate planning context, the Durable Power of Attorney is generally worded very broadly to give your Agent the power to step into your legal shoes in almost any circumstance. In effect, you tell your Agent “You can do anything I can do."
Now, if you have prepared the Durable Power of Attorney and then become incapacitated, no one has to go through a probate proceeding to appoint a guardian or conservator to act for you – you have already given your Agent the power to do so. As you can see, the Durable Power of Attorney can save precious time and expense in critical situations and avoid having your personal affairs become the subject of a public proceeding.
Appointing a Successor Agent
It is often a good idea to appoint one or more successor Agents. The Agent you appoint in your Durable Power of Attorney may die or for some other reason become unable or unwilling to act as your Agent. In that case, you may be left without someone to act for you when you most need that assistance.
Appointing successors to your first choice of Agent helps insure that someone is always available to handle your affairs. Of course, each successor that you appoint should be someone that has your complete trust.
Revoking a Power of Attorney
As long as you are competent, you have the power to revoke your Durable Power of Attorney. To do so, send written notice to your Agent notifying him or her that the document has been revoked. Once the Agent has notice of your revocation, the Agent may take no further action under the Durable Power of Attorney. However, your revocation will not undo any permissible actions that the Agent has taken prior to being notified that the Power of Attorney has been terminated.
You must also notify third parties with whom your Agent has been dealing that the Durable Power of Attorney has been revoked. For example, if the Agent has been dealing with a stockbroker, you must notify the stockbroker as soon as possible. Do this in writing, as well, and do it immediately. Third parties who do not receive notice of the revocation are entitled to, and probably will, continue to rely on the Durable Power of Attorney.
Making the Durable Power of Attorney Effective upon Incapacity.
It is possible to have a Durable Power of Attorney that only becomes effective if and when you become incapacitated. This document is referred as a "springing" Durable Power of Attorney because it "springs to life" on the occurrence of a future event – your incapacity. The document should include a detailed definition of "disability" to make clear the circumstances in which your Agent may act on your behalf.
Knowing that your Agent is unable to exercise his or her powers until you are actually unable to do so yourself may make using the Durable Power of Attorney more comfortable for you. Unfortunately, even with a good definition of incapacity in the springing Durable Power of Attorney, your Agent may find that third parties are simply not willing to make the judgment that you are indeed disabled. If they are wrong, they may be held liable to you for any damages that you sustain as a result of the error in judgment. You may therefore find the springing document cannot be relied upon in all circumstances.
Don't Procrastinate!
Estate planning is easy to put off. But don't! Advance planning, such as executing a Durable Power of Attorney, may make a horrible circumstance for you and your family just a bit more bearable.
Monday, 01 October 2007
Seniors worry about aging and illness as well as who will take care of their family when they are gone. Because of this estate planning is so important. With estate planning seniors can make a plan while they are still healthy as to how their estates will be handled upon their death and they will have the reassurance knowing their families are taken care of. There are several things seniors need to do, but the first and most important is to create a financial plan.
In order to create a financial plan it is important to consider all the different retirement issues. The plan should include developing a retirement budget. Many times during retirement income is reduced so a budget is very important. Also, the plan should address consolidating income. A discussion of how long term care would be paid for and financing options should be had so there is a basic understanding of what will pass. Investment planning should be included in the plan as well as any estate decisions that will need to be made. Tax issues are also important and should be discussed and included in the plan.
The place seniors should start is with a complete financial inventory. This includes taking not of income, assets, expenses and even liabilities. Talk about what the senior is interested in long term. Is retirement living an option or will the family home be sold. These are important questions that should be worked out early on before a situation arises. Finally, determine what kind of insurance the senior will have as well as how much money for retirement.
Also, discuss a senior life settlement. This is an option for seniors who want to sell their life insurance policy for more than the cash value the life insurance company would give them to cash out. This means seniors can sell life settlements and get money to live their retirement on and the individual who bought the insurance policy will simply cash it out upon death.
Before making any of these serious decisions it is important for seniors to discuss their options with a professional. Lawyers well versed in senior matters or financial planers are two great resources for seniors to have their legal questions answered and to receive the help they need planning their retirement. Most of the time using an expensive attorney will be expensive in the short run but it will result in major savings down the road and is worthwhile.
Natalie Aranda writes about financing. A senior life settlement is an option for seniors who want to sell their life insurance policy for more than the cash value the life insurance company would give them to cash out. This means seniors can sell life settlements and get money to live their retirement on and the individual who bought the insurance policy will simply cash it out upon death.
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