Relocating your kids when you have a custody order

Moving your kids when you have a custody order is about as painful as custody was in the first place. Whether you are a parent with primary custody, partial custody, or joint custody, you know that living with custody orders means living with the constant possibility of court supervision of your parenting. If you want to move to a new location, there may be significant impacts on your custody or visitation arrangements. Custody relocation can create direct conflict between the custodial parent’s desire to move and the non-custodial parent’s desire to maintain a relationship with their child.

In determining whether relocation is possible or right for you, we should begin by considering what form of custody relocation you’re considering. It is in-state, out-of-state or international? Obviously the distance you’re relocating has a dramatic impact on how to approach the matter, legally.

Forms of Custody Relocation

In-State Relocation: In-state relocation occurs when the custodial parent wishes to move to another city or region within the same state or jurisdiction. In Pennsylvania, if you’re moving from one school district to another, you will need the agreement of the other parent and potentially of the court. Even if the move is within a school district, if it’s a move a great distance away from the other parent, you may still need agreement or a court order.

Out-of-State Relocation: Out-of-state relocation occurs when the custodial parent wishes to move to a new state or jurisdiction. Relocating to a new state often comes with more stringent legal requirements since it will directly affect the non-custodial parent’s ability to maintain visitation and parental involvement. Of course, a move just across a state line is less serious than a move across the country. Out-of-state relocations also mean that the jurisdiction that will have control over future custody modifications will likely change. That sort of change of venue has to be approved by the court.

International Relocation: International relocation occurs when the custodial parent wishes to move to another country with the child. This becomes even more complicated, as international custody laws must be considered. Treaties and international conventions can control many of the rules in these scenarios, and such relocations are generally disfavored by the courts.

How to Handle Custody Relocation

Handling a custody relocation case typically involves the following steps:

  1. Providing Notice—If you are seeking relocation, you must provide formal notice to your co-parent and the court. This notice should include your proposed move, why you are moving, and revised parenting plan or visitation schedule. This should include some give and take—a co-parent will likely not want to hear that the schedule and custody plan have to change because of your new job or other opportunity.
  2. Raising Objections—If you are the non-custodial parent and you would like to object to the move, you can do so. If there is no agreement, the case has to be taken through the courts to get judicial approval.
  3. Attending Mediation—You and your co-parent may need to attend mediation to try and reach an agreement on relocating and modifying custody or a visitation plan.
  4. Attending a Court Hearing—If you are unable to reach an agreement through mediation, you and your co-parent will need to attend a court hearing. During this hearing, you and your co-parent will both have opportunities to present any evidence or arguments in support of or opposition to the relocation and its impact on your child’s best interests.
  5. Applying the Best Interests Standard—The court’s primary consideration in custody relocation cases is the best interests of the child. The court will weigh factors like the reason for the move, the relationship between the child and both parents, the child’s age, any educational needs, and other relevant factors when determining whether the move is in the child’s best interest.
  6. Receiving the Decision—The court will determine whether the relocation is allowed and whether any modifications to the custody or visitation arrangement are necessary.

You need caring representation to protect your child’s best interests.

Relocation cases can be emotional, but they are always important. The family law attorneys at Cornerstone Law Firm can help you evaluate your options and consider what’s ahead. If you are looking to file a petition for custody relocation or to object one, call us. We can help you mediate with your co-parent, present your case, and protect your parental rights while providing the best outcome for your child. Call us today to set up a consultation.

Updated Dog Law in Pennsylvania

On October 23, 2023, Gov. Josh Shapiro signed into law Senate Bill 746, which increases penalties for dog owners with dogs that have attacked people or other animals. The stated purpose of this bill is to:

  • improve public safety,
  • improve conditions for dogs in kennels and shelters,
  • ensure dogs that are adopted or purchased aren’t considered dangerous, and
  • help put a stop to infectious diseases among dogs.

Changes to the dog law are set to take effect 90 days after the bill is signed.

What could this mean for you and your community?

The dog law in Pennsylvania ensures that owners of dangerous dogs are held liable if their dog attacks a person or another domestic animal. The updated dog law now requires all dogs to be licensed at the time of purchase. The seller of a dog is required to provide an application for the dog license at the time of purchase. Fees for the license have also been increased. On March 1, 2024, the fee will increase to $8.70. If the dog is spayed or neutered, the prior rate of $6.70 will apply until March 1. However, if the dog is not spayed or neutered, the new cost will apply. A lifetime dog license will also be raised to $52.70 on March 1st as well. If you are looking to purchase a license, The Pennsylvania County Treasurers Office has licenses available for purchase.

How does the new law protect against dangerous dogs?

If a person fails to license their dog, fines now range from $100 to $500, as well as court costs. The licensing requirements are geared at preventing stray dogs and illegal puppy mills. It also allows the Department of Agriculture to monitor dangerous dogs. Criminal penalties will also be increasing as well. Fines range from $500 to $1,000 for summary offenses and $1,000 to $5,000 for misdemeanors. If an owner’s dog is found to be dangerous and attacks again, owners will be required to find and pay for a kennel. The dog is to remain at the kennel during court until a final decision is made.

How does the new law effect kennel owners?

Kennel licenses are also set to increase on March 1, 2024. Kennels who decide to put a dog up for adoption or sale are now required to place the license number in the advertisement as well. Breeder information, vaccination, medical documentation and any known attack on a human or other domestic animal must be disclosed to the buyer. Any new dogs brought into the Commonwealth must be kept isolated for 14 days.

We Can Help

If you have questions about the updated law or if you’ve been bitten by a dangerous dog, call Cornerstone Law Firm today. We’d be happy to set up a consultation to discuss your matter and rights.

What is Dram Shop Liability?

When you’ve been injured by a driver who drank and drove, it’s not just the driver who is liable. In some cases, the bar that served a driver too much alcohol before turning them loose on the roads is also liable for your injuries. This is called “dram shop liability,” named for an old-fashioned term for bars.

Dram shop liability is a common law principle that holds establishments that serve alcohol liable for the damages caused by drunk patrons after they leave the establishment. This includes situations where someone leaves the bar drunk and gets into a car accident and kills a family member of someone else. In those situations, the family of the person who was injured or killed may sue not only the actual drunk driver, but also the bar that served them excessive alcohol. Dram shop liability in Pennsylvania requires showing that the bar was aware that the person was intoxicated and continued serving alcohol beyond the legal limit. This is fact specific injury and is generally only attachable against the bar, not against the bar’s insurance.

Determining whether the bar knew the person was intoxicated can be difficult, but surveillance footage, witnesses, and the person’s own testimony can contribute to proving the case. Bars are governed by the Pennsylvania Liquor Control Board, and there are regulations about when they can serve alcohol. When a customer is visibly inebriated, that person should not be served any more alcohol.

One of the reasons that insurance does not typically cover these situations is because it is considered an intentional tort. That means that the actions taken by the bar were reckless or intentional, rather than merely negligent.

It’s not just bars that are covered, by the way. Hotels, restaurants, and any other establishments that serve alcohol can be liable under these rules.

If you or a loved one has been in a car accident you should consult with an attorney about whether bringing a dram shop action will make the case stronger or weaker. By bringing a dram shop issue into the mix, you risk the possibility that certain insurances will not kick in, which are usually your surest source of recovery in an injury case. Contact the personal injury attorneys at Cornerstone Law Firm for a free consultation about your injury.

Common Legal Terms

Almost every field comes with its own set of jargon that really only makes sense to the people in that field. The law is certainly no exception. We’d like to demystify some of that jargon. Below is a list of 50 common legal terms you might encounter and what they mean.

Acquittal—An acquittal occurs when a judge or jury finds a criminal defendant to be not guilty.

Ad hoc—Latin for “for this purpose.” It refers to something created or designed for a specific purpose, and perhaps something done with a clear plan but specific to the task at hand, without precedent.

Ad hominem—Latin for “to the person.” It refers to an attack on an individual’s character instead of addressing an argument.

Admissible—Evidence that may be considered by either a judge or jury during legal proceedings. Admissible evidence must be relevant to the case. That means it must have some logical tendency to prove or disprove a fact at issue. There are certain categories of evidence that are never admissible. If the evidence may not be considered, it is inadmissible.

Affidavit—An affidavit is a written statement made under oath. It is often used as evidence during court cases.

Amicus Curiae—Latin for “friend of the court.” This phrase refers to someone who provides information to the court but is not directly involved with the case.

Arraignment—An arraignment is the first court appearance after a criminal defendant has been arrested. A judge will read the charges against the defendant and obtain contact information to be used for future hearings. The judge may also set bail.

Bail—Money paid to the court that ensures a defendant will appear for court dates.

Bench Trial—This is a trial before a judge without a jury. Bench trials can be faster than jury trials and, in some cases, more strategically advantageous. You may want a bench trial if the issues are novel or involve the complexities of the law a jury might not fully grasp, or if you think the jury will be too emotionally biased.

Brief—This is a written statement that details the facts and arguments of one side of a case. Briefs are submitted during a trial and attempt to persuade the court to take that side.

Burden of Proof—This refers to the obligation to produce evidence and prove a claim in court. For criminal trials, prosecutors must prove a defendant’s guilt “beyond a reasonable doubt.” This means a prosecutor must show no reasonable minds could disagree that the defendant is guilty. For civil trials, plaintiffs must prove their case with a “preponderance of evidence.” A preponderance just means “greater than 50%.” In a civil case, the plaintiff must only prove it is more likely than not that their view of the facts is correct.

Concurrent Sentence—Concurrent sentences are prison sentences that are served at the same time, so that the actual sentence only consists of the longest of the concurrent sentences. Judges use this to sentence a defendant for multiple crimes as part of the same conviction.

Consecutive Sentence—Consecutive sentences are prison sentences that are served one after the other. Rather than serving simultaneously like in concurrent sentences, consecutive sentences take the total of all sentencing time. A defendant has to be paroled or complete one of the consecutive sentences before serving the next, so that a defendant can actually get paroled without serving the time on each specific count but then has to start serving the next count.

De Facto—Latin for “in fact.” This describes something that is true in practice, even if it’s not legally recognized.

De Jure—Latin for “by law.” This describes something that is legally recognized and established, even though it might not be the truth in fact.

Defamation—This refers to a false statement that harms an individual’s reputation and leads to legal claims for damages. There are two common types of defamation: libel and slander. Libel refers to false statements that are made in writing. Slander refers to false statements that are made orally.

Defendant—A defendant is the party being charged in either a criminal or civil lawsuit.

Discovery—Discovery refers to the process by which parties in a lawsuit gather and exchange evidence and information before going to trial.

Docket—This refers to a log of the history of each case tried in a court. There are typically brief entries in chronological order that summarize what happened during the proceedings.

Double Jeopardy—A legal principle that prevents an individual from being tried or punished twice for the same crime in the same jurisdiction. The protections provided by double jeopardy are meant to prevent an individual from being unfairly targeted or harassed by the legal system. There are some exceptions, like differing jurisdictions (state v. federal), mistrials, and/or appeals.

Due Process—This is the right to a fair and impartial legal process. What “process” is “due” can be complex and subtle. It will depend on how important the rights at stake in the “process” are. But almost always, due process requires notice to the person who could be harmed by the process, an opportunity to present their evidence, and a right to a neutral, impartial decisionmaker. Due process in a criminal case involves many different rights for the defendant. It can also involve civil matters such as loss of a driver’s or professional license, taxation, or changes in human-services benefits.

Ex Parte—Latin for “from one party.” This refers to a legal proceeding in which only one party is present.

Felony—A felony is a criminal charge reserved for the most severe types of crime. There are three grades (First Degree Felony, Second Degree Felony, and Third Degree Felony) that determine any jail time and/or fines associated with each criminal charge.

Habeas Corpus—Latin for “You shall have the body.” Habeas Corpus is a writ that protects an individual’s right to not be unlawfully detained. It requires the government to prove it has a right to detain a person. But after trial, the writ of Habeas Corpus disappears, and the defendant must seek relief through the Post-Conviction Relief Act procedure.

In Camera—Latin for “in private.” This refers to closed-door proceedings, or proceedings that take place in front of a judge and away from a jury or the public. These often involve the court questioning a minor or reviewing sensitive documents that might or might not need to be disclosed in discovery.

In Forma Pauperis—Latin for “in the manner of a poor person.” This refers to a legal status granted to individuals who cannot afford court fees. It is intended to ensure individuals who lack financial means are not denied access to legal rights and remedies.

Indictment—An indictment is a formal charge, often reserved for felonies, issued by a grand jury after the grand jury has reviewed a prosecutor’s evidence. A grand jury is like a trial before a trial. The prosecutor must present evidence of suspicion to the grand jury, and if the grand jury determines there is sufficient evidence that the defendant may be guilty, the case will then go to a trial.

Injunction—An injunction is a court order requiring one party to either refrain from specific actions or perform specific actions. Examples of injunctions include restraining orders, cease-and-desist orders, and requirements that a neighbor remove an obstruction that is interfering with an owner’s property.

Ipso Facto—Latin for “by the fact itself.” This term describes something that occurs as a result of an action.

Jurisdiction—This refers to a court’s legal or geographical authority to hear and decide certain cases. Without jurisdiction, no action a court can take will be legitimate or have authority. The court requires jurisdiction both over the person and over the issue, the subject matter of the dispute.

Jury—A jury is the group of people selected to hear a trial and render a verdict. Jurors are summoned from motor vehicle and voter registration lists. They will then be questioned by the attorneys from both sides and the judge to determine if any biases exist. Criminal trials typically have 12 jurors and civil trials can have anywhere from 6 to 12 jurors.

Lien—A lien is a legal claim made against an individual’s property in order to secure payment of a debt. If you sell property subject to a lien, the lien must be paid out of the sale price to clear the property for the next owner. A lien may also allow the lienholder to force the sale of the property to satisfy the lien.

Litigation—Litigation refers to a legal case or lawsuit. Plaintiffs and defendants can be referred to as litigants, and attorneys are litigators.

Mens Rea—Latin for “guilty mind.” This refers to the intent or mental state behind a criminal act. In the American legal system, a conscious intent to commit a crime with a guilty state of mind is almost always required, particularly for serious offenses. Mens rea may refer to a state of mind like intent to commit the crime, or a person causing harm recklessly or negligently. Some crimes—like murder—have complicated schemes where different mens rea lead to different levels of guilt. Others do not, such as parking, traffic, and alcohol-related offenses. It does not matter what your intent is if you are caught speeding, for instance.

Miranda Rights—Rights read to an individual who has been taken into custody before any interrogations take place. These are an extension of Fifth Amendment rights. The U.S. Supreme Court has decided that interrogations in police custody are so inherently psychologically coercive that the individual must be given these notices to protect their right not to incriminate themself. This is actually a unique facet of the American legal system. For instance, if a person wishes to stop answering police questioning, the police must stop. This is not true in many countries.

Misdemeanor—A misdemeanor is a criminal charge reserved for crimes that are worse than summary offenses but not as bad as felonies. There are three degrees of misdemeanors that determine any jail time and/or fines associated with each criminal charge.

Nolo Contendere—A Latin term that translates to “I do not wish to contend it.” A nolo contendere is a criminal plea in which the defendant does not admit guilt but accepts punishment, saying the evidence is sufficient to convict them without admitting they did, in fact, commit the crime. People sometimes use these where an admission to actually committing the crime could lead to a civil lawsuit.

Plaintiff—A plaintiff is the person filing a lawsuit in civil law.

Plea Bargain—An agreement between a prosecutor and defendant that resolves the case without going to trial. A plea agreement will usually include a specific sentence compromised between prosecutor and defense counsel. The courts usually honor these agreements for sentence.

Power of Attorney—A Power of Attorney is a legal document that grants authority to one person (an agent) to act on behalf of another person (a principal) in legal and financial matters. These often involve people who are legally incapacitated for one reason or another, such as due to health concerns.

Prosecution—Prosecution refers to the government’s attempt to prove a person guilty of a crime at trial.

Pro Bono—Latin for “for the good.” This refers to legal work that is done for free or at a reduced cost for the benefit of society, usually by an attorney volunteering.

Pro Tempore—This is sometimes shortened to “pro tem.” It’s a Latin phrase that means “temporary” or “for the time being.”

Quid Pro Quo—Latin for “something for something.” This refers to a reciprocal exchange of something of value.

Sanction—A sanction is a penalty, punishment, or coercive measure imposed by the court when an individual fails to comply with regulations. Sanctions can range from fines, orders, and restrictions to suspensions from the practice of law, and even imprisonment.

Statute of Limitations—This refers to the time limit an individual has to initiate a legal action. In most cases, once the statute of limitations has run out, the right to sue has been lost.

Subpoena—Latin for “under penalty.” A subpoena is a legal order for someone to appear in court as a witness or to produce evidence.

Tort—A tort is a civil (not criminal) wrong that leads to a lawsuit for damages.

Warrant—A warrant refers to the authorization from a court given to law enforcement to arrest someone or conduct a search.

Writ—A writ is a formal written order issued by a court.

At Cornerstone Law Firm, We Solve Problems. If you’re in a legal dispute, call us. We’d be happy to review your case and help you pursue the best outcome possible.

Franchising v. Licensing: An Entrepreneur’s Dilemma

For those wishing to start a business and work for themselves, there are a number of perplexing decisions that have to be made right up front. One of the most important decisions that you will have to face is whether to license a product, service or idea from someone else, or enter into a franchise agreement. Of course, you can always create your own ideas, in which case you will want to secure them as intellectual property with patents, trademarks and copyrights. But today, we want to focus on the question of how to leverage someone else’s idea to make money.

Franchising is the way of the future

Many businesses work on a franchise model. This means that for an up-front fee and royalties, you have the opportunity to use the brand, supplier network, training, and resources of a larger company. The advantages to this approach are obvious, in that they allow you to get hands on training and specialized knowledge from someone who has already “done the hard work” of figuring out how to make a successful business run. You can learn from their mistakes, train with them, and even observe how their work is done in other stores.

Additionally, franchises typically require a certain amount of advertising from each of their franchisees. This means that by joining a growing network of other franchisees, you benefit from the marketing money that all of the franchisees are putting into the brand in a nation or region.

Of course, all of this assumes that the brand itself and the name have become well known and have a positive reputation. By spending money and constantly giving a percentage of your sales right off the top to this entity, you are giving up a fairly big bargaining chip as an entrepreneur right at the start. This means that you want to be sure that the franchise that you are tapping into has a great reputation and a name that is growing in the region of the country you’re in.

It also means that you are tied to this company. If they end up in a lawsuit because their products are allegedly infringing on others, you may be a part of that lawsuit too. If they have monetary problems, then the dissolution of the entire franchising network will certainly affect you. You want to make sure that there is a great deal of financial health in the “mothership” that you are tapping into.

Licensing products: a halfway approach

Instead of franchising, you also have the opportunity, in many cases, to license the product from someone else. This means paying them royalty on everything that you sell. This is similar to the franchising model but often doesn’t necessarily require that you enter into the same long-term binding agreements. You give them a royalty every time that you make a sale and that is it. You don’t get hands-on training, but you also aren’t typically required to do the kinds of marketing and other training sessions that can be required as part of franchise agreements. You aren’t affected if the franchise network breaks up because you can keep licensing the product or intellectual property from whomever owns it. You usually don’t get to sell it under the same brand because you are using their product in your business.

The advantages to licensing are less control from the outside. One of the biggest disadvantages is that they can typically stop licensing after a period of time, leaving you out in the cold. Of course, your requirements with the company are less onerous and you have more opportunities to branch out from there, should you desire.

Conclusion

Working with a business savvy attorney team is extremely important. These are just two of many approaches you have in building a business from the ground up. As an entrepreneur you may also want to consider what the same investment would do if you were to create your own product or service. Navigating the waters of licensing and franchising are extremely important and require careful analysis up front about how to best set up your business for success. If you have questions about licensing or franchising call one of our attorneys at Cornerstone Law Firm to set up a consultation today.

Foreclosure and Rent-to-Own Agreements

Rent-to-Own Agreements have become more popular in Pennsylvania in the last several years as an alternative method of financing for buyers who are unable to get traditional mortgages. Sellers sometimes offer these agreements as a way to obtain financing without going through a bank. Under this arrangement, the owner of a property agrees to sell the real estate in exchange for a certain purchase price paid out over years with an interest rate sometimes either explicitly written out or built into a rental amount paid each month. Usually the rent-to-own buyer also pays all taxes and insurance on the property.

Rent-to-own agreements typically come with contracts laying out all of these terms and requirements for what happens when there is a breach of the agreement. However, if the buyer breaches the agreement, the seller often will sue for breach of contract or for a simple eviction instead of going through foreclosure. Here are a few things you should know about rent-to-own agreements.

1. Rent-to-own agreements are technically legal but are scrutinized by judges when enforcement is sought.

The first thing that you need to know about rent-to-own agreements if you are being foreclosed on is that rent-to-own agreements are technically legal under Pennsylvania law, but judges are often understandably skeptical of them. In other words, judges have a lot of questions about how these agreements should be enforced because they are basically an attempt to get around both the typical landlord tenant rules and the foreclosure rules by “falling into the crack” between these two areas of law. An agreement to rent-to-own makes you neither a renter nor a buyer.

However, it is important to recognize that that doesn’t make them illegal per se. They can be enforced and there still can be serious consequences for breaching the agreement.

2. Look at the contract you have first to determine what remedies you have.

As an initial matter, the first place you should start is with the contract. Often the rent-to-own contracts are not written well, and there may be ambiguity in the way the contract is construed. It is important to talk to an experienced litigation or real-estate attorney to learn more about how the ambiguities in the agreement might be construed under relevant statues and precedents. However, if the agreement lays out remedies and protections that you have as the buyer, these are some of the first protections you should be raising in pleadings or with the court.

3. Foreclosure may be an appropriate remedy for the seller.

If the seller is just suing you under breach of contract or attempting to evict you, you may have a right to insist that they go through the foreclosure process. There are strenuous protections for buyers who are being foreclosed on if they are failing to meet their mortgages. You may have a right to invoke these protections under many rent-to-own agreements. Whether you have these rights is a delicate question of law that depends on the facts of your specific contract. Therefore, it is important to consult with a lawyer if you are in this situation.

4. Do not try to handle this on your own.

There are some points in life where it makes sense to try to handle things on your own. When you are being sued, and potentially going to lose all of the equity you have built in a home, that is not the appropriate time to try to handle things on your own. Call an expert. Speak with a real estate and litigation attorney, such as those at Cornerstone Law Firm, so you can learn more about the protections that you have under the law.

Do not lose the investment that you have put out into your property.

If you have been investing in real estate for some period of time with a seller who now wants to go back on the deal, or evict you because you have fallen behind, it is extremely important that you protect your rights. Contact an attorney at Cornerstone Law Firm for a consultation on what can be done to protect those rights.

Appealing a Custody Order

What do you do when a judge gets the custody decision wrong? How can you appeal a bad decision that is going to hurt your children or your family? Under Pennsylvania law there are typically two types of appeals that you take from custody orders.

Two Types of Appeals

The first is when a decision was made by a custody master. A “master” is a hearing officer who makes a determination that is essentially a recommendation to the judge. Depending on what county you are in, you may be able to appeal this decision to a judge of the Court of Common Pleas. You usually have 20 or 30 days to appeal this determination—but check local rules to be sure. This appeal involves asking a judge to take a second look. This review is done de novo, which means that the judge makes the determination all over again as if the master had not already ruled.

The second type of appeal is when the judge has made the decision after a trial. The appeal goes from the Court of Common Pleas to a new court altogether—the Superior Court. This is a much more difficult appeal to take because it requires showing to a higher court that the judge actually made an abuse of discretion. The judge is given an incredible amount of latitude in making his or her decision and usually is not overturned by appellate courts. Appellate courts (that is, the courts that hear appeals) tend to side with the decision of the judge below unless very good grounds for reversal can be demonstrated.

Reasons to Bring an Appeal

There are a number of reasons to bring an appeal. One is when the decision is a violation of the law. This is where a judge intentionally misapplies factors and disregards important evidence, or otherwise makes a bad decision that is based on the law. In such cases, there may be a strong appeal. The second way that an appeal can be brought is where the judge made a bad ruling at trial. Grounds for a redetermination on appeal can include:

  • Considering evidence that is illegal,
  • Not considering evidence that they are required to,
  • Disallowing an expert, or
  • Allowing testimony that was not legal.

Third, and finally, a decision can be appealed on the basis that what was done is not in the best interest of the child. Where there has been an abuse of the court’s discretion, and where the judge’s decision is one that cannot be supported by the evidence, as viewed by a rational fact finder, an appellate court may consider reversing a decision by the trial court.

In all these cases, appeals are difficult to win. It is important to get a good outcome in the custody trial in the first place. If you have lost trial and want to appeal, call the attorneys at Cornerstone Law Firm so we can discuss how to appeal your custody decision.

Making Your Band into a Brand: Does Your Band Need an LLC?

While it’s not strictly necessary, an LLC can help your band. Whether you’re rocking out with your audience in a packed concert or recording a new song in a quiet studio, there are certain risks and responsibilities your band may encounter. An LLC can help to limit those risks and protect the interests of your band and its members.

What is an LLC?

A Limited Liability Company (LLC) is a company that can be essentially anything you want. Once established, the LLC can operate as a full legal entity separate from any members, owners, and employees. You can think of it like a person. In much the same way that you are a legal person when you’re born and given a social security number, an LLC becomes a legal “person” when it’s made.

What does this mean for your band?

As a legal entity, an LLC can do everything a person can do: make contracts, own intellectual property, sue and be sued. All of these can be helpful benefits for your band.

Contracts

With the ability to make contracts under its name, the LLC will be the party responsible for executing the contract. You may sign the contract under the authority of the LLC, but you will not be personally responsible. This means if you cannot pay or otherwise perform under the contract, the LLC is responsible instead of you. Others may sue the LLC for breach of contract. Even if they sue the LLC and take all of its property, they can’t come after your personal property. Only in very rare and egregious circumstances will they pierce through the LLC to reach you.

Intellectual Property

LLCs can also help to keep your intellectual property organized. You can set it up so that the LLC (and not the individual members) owns all the copyrights to your music. This will make it easier to share profits and reduce friction between band members over who owns the copyright and who receives the royalties.

Dissolving the LLC

If your band ever breaks up, you can dissolve the LLC. The law provides automatic and simple processes for the dissolution of an LLC and the distribution of any remaining assets. This can help you avoid conflicts between band members.

Other Benefits to LLCs

Clarifying Expectations

Like we said before, an LLC can be essentially anything you want it to be. You create it by filing articles of organization and creating a legal contract called an operating agreement. You can do whatever you want within this operating agreement. One benefit is that you can assign individual band members, managers, agents, and other people specified roles, responsibilities, and benefits. This can help to clarify expectations and let everyone know what to do. And, in the event that someone can’t or won’t live up to those expectations, the operating agreement can provide a remedy for you.

Fiduciary Duties

LLCs create what lawyers call “fiduciary duties.” Fiduciary duties exist between the members of the LLC, and between the members as a whole and their employees, managers, and officers. This means that everyone must act with:

  1. A duty of loyalty—They will not exploit the LLC and its members for personal benefit or for the benefit of a third party.
  2. A duty of care—They must do their best in good faith to advance the interests of the LLC as a whole.

Let’s say a manager becomes a member and starts to exploit the LLC for the record label’s interest. That person has breached their fiduciary duty and can be sued and expelled from the LLC. They must then return any assets they took and provide compensation for any damage they have done.

Better Credit Options

Because LLCs can form contracts, they can have credit scores. This can be helpful, especially if your own credit score is not so good. If you wanted to, say, lease equipment, you may not be able to do so under your own name. The LLC can have better credit than you or any of the other band members. Many businesses actually prefer to give financing to business entities rather than individuals.

Tax Benefits

Finally, there are tax benefits for LLCs. As a business, you can “write off” the costs of doing business, the depreciation of instruments and other equipment, and possibly even the costs of promoting and advertising yourself (though this may vary). You would not be able to do this as an individual when filing your taxes, unless you can honestly claim you’re fully self-employed as a member of the band.

Also, the LLC—just like a person—pays its own taxes. If the LLC makes money, it pays corporate taxes. You only pay whatever income comes through the LLC to you as part of your income taxes. This means you can “hold” money within the LLC and wait to distribute it to yourselves until the right time (like when taxes are lower).

Call Cornerstone Law Firm for help.

As you can see, there are lots of great benefits to forming an LLC for your band. If you’d like to set up an LLC, call Cornerstone Law Firm. Our attorneys have experience with drafting operating agreements and other organizational documents for lots of LLCs. We can help with yours too. Give us a call today to set up a consultation!

Do I have to list all my creditors when I file for bankruptcy?

When filing for bankruptcy, a consumer is required to list all their creditors in their bankruptcy petition and schedules. This includes creditors for secured debts, such as a mortgage or car loan, and unsecured debts, such as credit card debt or medical bills. Failing to list a creditor can have serious consequences, including having the debt excluded from the bankruptcy discharge and, therefore, collectible by the creditor after the bankruptcy.

Creditors whose debts are not dischargeable must also be listed on the bankruptcy petition and schedules such as student loans, child support, and alimony.

Creditors must also be listed even in cases where a consumer may wish to continue making payments on a debt outside of the bankruptcy case, such as a filer wishing to keep their car and continue making payments on the car loan. The same is true if a consumer wishes to pay back an otherwise dischargeable debt after the bankruptcy case is discharged, such as voluntarily paying back a loan from a family member or friend.

It is important to note that if a creditor is excluded from the bankruptcy petition, the consumer may still be responsible for repaying the debt. Excluding a creditor from the bankruptcy petition does not discharge the debt, and the creditor may still be able to collect the debt outside of the bankruptcy case.

In summary, a consumer is required to list all their creditors in their bankruptcy petition. If a consumer excludes a creditor from the bankruptcy petition, they may still be responsible for repaying the debt outside of the bankruptcy case.

It is vital to consult with an experienced bankruptcy attorney about your specific situation. If you’re facing debts that you cannot pay and wish to consult an attorney about your options, call Cornerstone Law Firm and speak with one of our attorneys about how your debt should be handled.

Can filing for bankruptcy disrupt my social security benefits?

Because of bankruptcy’s reputation, it’s normal to have questions about filing. When it comes to your social security benefits, you don’t have to worry. Individuals who file for bankruptcy are typically able to keep their social security benefits. You may be able to use them to pay living expenses while going through the bankruptcy process, and after receiving a bankruptcy discharge.

Under the Social Security Act, social security benefits are protected from garnishment and other legal proceedings, including bankruptcy. This means that social security benefits cannot be used to pay off debts that are dischargeable in bankruptcy, such as credit card debt or medical bills.

However, there are some exceptions to this rule. For example, if you owe a debt to the Federal government, such as a student loan or tax debt, a portion of your social security benefits may be used to pay toward the debt.

Additionally, it is important to note that the amount of social security benefits that you are eligible to receive may be impacted by filing for bankruptcy. In some cases, individuals who have a large amount of debt discharged in bankruptcy may see an increase in their social security benefits. This is because the debt that is discharged in bankruptcy may have been counted against their income for purposes of determining their eligibility for social security benefits.

In summary:

  • Filing for bankruptcy does not typically have a direct impact on your social security benefits.
  • Social security benefits are protected from garnishment and other legal proceedings, including bankruptcy.
  • Social security benefits cannot be used to pay off debts that are dischargeable in bankruptcy.
  • There are limited exceptions for debts owed to the Federal government.

If you are considering filing for bankruptcy and are receiving social security benefits, you should consult with an experienced bankruptcy attorney to understand your rights and options. At Cornerstone Law Firm, our attorneys can help you determine the best path forward for you given your situation. Call today for your free consultation.